商法案例

Entores Ltd v Miles Far East Corporation [1955] is a landmark decision in contract law on the moment of acceptance of a contract over telex.

Facts

Entores was a London-based trading company that sent an offer by telex for the purchase of copper cathodes from a company based in Amsterdam. The Dutch company sent an acceptance by telex. The contract was not fulfilled and so Entores attempted to sue the owner of the Dutch company for damages. The controlling company, Miles Far East Corp, was based in the US and under English law Entores could only bring the action in the US (serve notice of writ outside the jurisdiction) if it could prove that the contract was formed within the jurisdiction, i.e. in London rather than Amsterdam.

Judgment

When a contract is made by post it is clear law throughout the common law countries that the acceptance is complete as soon as the letter is put into the post box, and that is the place where the contract is made. But there is no clear rule about contracts made by telephone or by Telex. Communications by these means are virtually instantaneous and stand on a different footing. Denning LJ found that the regular postal rule did not apply for instantaneous means of communications such as a telex. Instead, acceptance occurs where the message of acceptance is read.

Denny, Mott & Dickson Ltd v James B Fraser & Co Ltd（1944）

This is a case concerning frustration of contract.

James B Fraser & Co Ltd were timber merchants. An agreement with Denny, Mott & Dickson Ltd in 1929 said they would buy wood from Denny, and lease a timber yard. Because of the Control of Timber (No 4) Order 1939, further transactions between the parties became impossible from the end of September, 1939. Denny continued to occupy the timber yard.

Q: what’s the status of the contract?

A: It used to be valid. Since the parliament passed law to control timber trade, the contract became supervening illegality.