Entores Ltd v Miles Far East Corporation [1955] 2 QB 327
Facts
Entores, a London company, negotiated by telex with a representative of Miles Far East Corporation in Amsterdam for the purchase of copper cathodes. An offer was sent from London, and acceptance was transmitted back from Amsterdam to London. A later dispute required Entores to establish a basis for proceedings in England against the foreign company. The place at which the agreement was formed therefore mattered. The court had to decide whether the telex acceptance took effect when sent abroad or when received by the offeror in England.
Legal Issue
Did acceptance by telex take effect when sent from Amsterdam or when received in London, determining the place of formation for the jurisdictional issue?
Held
The Court of Appeal held that the contract was formed in London, where the acceptance by telex was received. The postal rule did not apply to this essentially instantaneous exchange. Communication of acceptance to the offeror, rather than dispatch by the offeree, supplied the relevant point of formation and supported the jurisdictional basis relied upon.
Denning LJ used examples of unheard speech and interrupted telephone calls to explain the need for effective communication. He also recognised that responsibility for a failure in communication can matter where one party reasonably believes the message was received. Those illustrations should not be turned into automatic rules for every technology. Nor does the place of receipt invariably determine the contract's substantive governing law, which is a separate question.
⭐ Legal Principle
Acceptance by an ordinary instantaneous communication takes effect when received by the offeror, unlike acceptance under the postal rule. Responsibility for a communication failure and reasonable understandings may affect difficult cases. Place of formation must be distinguished from the separate rules on jurisdiction and governing law.
Significance
Entores supplies the starting point for instantaneous acceptance and contrasts with Adams v Lindsell. Brinkibon later confirmed the approach while emphasising that difficult cases depend on intention, business practice and risk allocation. For electronic communications, identify when the message became effectively available and any relevant fault rather than assuming all technologies operate identically. The case also illustrates why an answer should state the specific jurisdictional issue instead of equating receipt in England with automatic English governing law.
Common exam questions about this case
Where was the contract made by the telex exchange?
The acceptance was received in London, so the court located formation there. Dispatch from Amsterdam did not trigger the postal rule. Entores therefore focuses on communication to the offeror in an instantaneous exchange, rather than treating every message as effective when the sender has done all it can.
Why did Denning discuss unheard telephone messages?
Those examples illustrated that attempted acceptance may fail if it is not effectively communicated. Responsibility for the failure can also matter where one party reasonably assumes receipt. The examples explain the underlying communication principle; they do not establish an exhaustive mechanical answer for every interruption or modern messaging system.
How does Brinkibon qualify use of Entores?
Brinkibon confirms receipt for the straightforward case but recognises that office hours, intermediaries and transmission failures need contextual analysis. Intention, business practice and risk allocation may matter. An answer about email should therefore apply Entores as a starting point while identifying the factual complications rather than relying on the technology's label alone.