ENTORES v MILES

General Principle:

An acceptance via instantaneous communication is not bound by the postal rule; acceptance must be communicated for it to create a binding contract.

Name:

Entores v Miles Far East Company [1955] 2 QB 327

Facts:

The claimant was a London based company. They offered to buy, through use of telex, goods from the defendant’s agent. The agents were located in Amsterdam. Their offer was accepted by the defendant's agents, again through use of a telex. As there was a dispute between the parties, the location where the contract had been concluded became very important.

Ratio:

The court held that since the acceptance was received in England, when the acceptance was sent via telex and read in England. Lord Denning reasoned that acceptance could not create a binding contract until it notified the offerer.

Application:

The onus (responsibility or burden to actually prove something) is on the person accepting to shout back, “I accept your offer” repeatedly until he is heard. Denning utilises many examples to demonstrate this rule. If two men are separated by a river and one attempts to notify the other of his acceptance of an offer (but he is drowned out by the sound of a passing plane), it is his responsibility to voice his acceptance again to create a contract. Because of Entores, no acceptance (outside of the post) can be valid unless it actually notifies the offerer.

Analysis:

Thus the onus is on Beatrice to communicate her acceptance. This principle is found in the case of Entores v Miles Far East [1955] 2 Q.B. 327 where Lord Denning said:

“Suppose, for instance, that I shout an offer to a man across a river or a courtyard but I do not hear his reply because it is drowned by an aircraft flying overhead. There is no contract at that moment. If he wishes to make a contract, he must wait till the aircraft is gone and then shout back his acceptance so that I can hear what he says. Not until I have his answer am I bound.” ([1955] 2 Q.B. 327 at 332).

Through the application of Entroes the onus is on Beatrice to communicate her acceptance to Aga. Anything short of this is bar any contract from being formed.