Contract Law lecture 7 Instantaneous Communication in Contracts Instantaneous communication - Telex - Fax - Email - Voicemail Why is it important? - Contracts can be made through these means of communication - Instantaneous communication could be argued to differs 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. - 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. > 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? > 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? > Some of these decisions can only be made based on practicality- Apple Corps Ltd v Apple Computer Inc [2004] EWHC 768. > Conductive Inkjet Technology Ltd v Uni-Pixel Displays Inc [2013] EWHC 2968- A contract resulting from complex negotiations can be held to be formed in two places at the same time.
-> 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, because 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