Instantaneous Communication in Contracts PDF

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Instantaneous Communication in Contracts...

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Instantaneous Communication in Contracts  Instantaneous Communication  Telex  Fax  E mail  Voicemail Why is this important? In today’s world, contracts can be made through these means of communication. Instantaneous communication could be argued to differ from using the post, for which the postal rule is applicable.  In relation to acceptance made using instantaneous communication, it is crucial to determine when and where the acceptance becomes effective.  Entores v Miles Far East Corp. [1955] 2 QB 327  Starting point of the law in this area.  Dealt with communication by telex.  The issue was where the acceptance took place.  Lord Denning- held acceptance by telex took place where it was received, and not where it was sent.  An extension of the postal rule was rejected.  Entores- Analysis  Are all instantaneous communication similar?  Should the same rules apply to all?  Are fax and emails not analogous to post? They can sit unread for sometime after delivery.  Issues become more pertinent when the question is when (ie time) the communication of acceptance is deemed effective.  Entores- Analysis contd.  Lord Denning- analogy of aeroplane distorting a contract conversation across a river.  For a fax, if there are problems in delivery, it should be noticed and communicated.  However, for emails, there may be no indication of problems in delivery on the part of the recipient.  How about when communication is sent out of office hours? Or when recipient is unavailable to notice?   

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Entores - Analysis contd. Was the decision in Entores based more upon what was reasonable to expect in a business context, than on a proper evaluation of the similarity/dissimilarity between modes of instantaneous communication and the post?

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Some of these decisions can only be made based on practicality- Apple Corps Ltd v Apple Computer Inc [2004] EWHC 768. Entores – Analysis contd.

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Note that Entores dealt with the place where contract was made and not the time. The case provides no direct authority as regards the time when a telex acceptance is effective. The postal rule is not applicable, as the Entores principle requires the acceptance to have arrived at the offeror’s address for it to be effective. The possibilities Should acceptance be effective when actually read by offeror? Should acceptance be effective when read by offeror’s agent, e.g an employee? Should acceptance be effective when it is received in the machine, and not yet read? Should acceptance be effective when the offeree/acceptor can reasonably expect it to have been read? The Brimnes [1975] QB 929 The communication was not an acceptance, but a notice of the withdrawal of a ship from a charter party.

It was held to be effective when it was received on the charterers’ telex machine ‘during office hours’, although it was not read until the next morning.  Brinkibon Ltd v Stahag Stahl [1983] 2 AC 34  The H o L approved the Entores approach, but did not indicate whether the same rule should apply in all circumstances. 

Lord Wilberforce stated as follows ‘No universal rule can cover all such cases: they must be resolved by reference to the intentions of the parties, by sound business practice and in some cases by a judgment as to where the risks should lie’.  Mondial Shipping and Chartering BV v Astate Shipping Ltd [1995] Com LC 1011  Dealt with a fax giving notice under a contract.  Held to be effective when the acceptor could ‘reasonably have expected it to be read’.  Particularly important in relation to communication such as email and voicemail.  The acceptor should be allowed to assume that the communication will be read at a time that could reasonably be expected in the normal course of events.  Thomas & Anor v BPE Solicitors [2010] EWHC 306  An email had been sent at 6pm on a Friday evening before a bank holiday weekend.  Defendant solicitors argued that it was not effective when received in the mailbox as it was sent after working hours and would only be seen on Tuesday morning.  Blair J decided that the issue must be resolved with reference to Lord Wilberforce’s quote in Brinkibon.  It was held that in the ‘context’ in which that email was sent, it was not to be deemed to be sent after working hours and was therefore effective at 6pm on the Friday if the email was an acceptance. 

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Recap Instantaneous communication can arguably differ from communication such as the post. Issues can arise as to time and place of delivery of the communication, occurrence of delivery, receipt of the communication etc. Therefore, it becomes important to think about and decipher when an acceptance might be effective if sent through instantaneous communication. A number of possibilities could be argued. The starting point of the law in this area is Entores v Miles Far East. Case law provides an indication of the principles that should be applied in these situations....