Brinkibon v Stahag …
Brinkibon Ltd v Stahag Stahl und Stahlwarenhandelsgesellschaft mbH
[1983] 2 AC 34 (House of Lords)
Case details
Court
House or Lords
Citation
[1983] 2 AC 34
Judges
Lord Wilberforce
Lord Fraser of Tullybelton
Lord Brandon of Oakbrook
Lord Russell of Kilowen
Lord Bridge of Harwich
Issues
Acceptance (postal rule)
Facts
The offeror, Brinkibon (London, England) wanted to sue the offeree, Stahag (Vienna, Austria) for breach of contract. Acceptance of Brinkibon’s offer had been by way of telex from London to Austria. Which jurisdiction’s law applied?
The answer to this question depended on whether the postal rule applied. The postal rule provides an exception to the general rule at common law that acceptance occurs when and where received; where the postal rule exception applies acceptance occurs when and where the acceptance is sent. Consequently, if the postal rule applied in this case the contract would have been concluded in England (where sent) and English law would apply; if it did not apply then the contract would have been concluded where the acceptance was received – Vienna.
Held
The postal rule does not apply to direct/instant forms of communication (including telex) – as telex was used here the postal rule did not apply and the contract was formed in Vienna - Austrian law applied.
Even though with telex the message may not be received by the intended recipient immediately (there may be agents or other third parties who receive the messages to be passed on to the intended recipient) a telex that goes directly from the offeree’s business to the offeror’s business (unlike a telegram which employs the use of a post office) should be treated as if it were an instantaneous communication. If a telex is sent to an office acceptance occurs when the telex reaches the place of business, not when it actually gets to the person to whom it is addressed.
However, although the postal rule does not apply to instantaneous forms of communication, there is no 'universal rule' with each case needing to be decided by reference to the intention of the parties.
[Lord Wilberforce] Since 1955 the use of Telex communication has been greatly expanded, and there are many variants on it. The senders and recipients may not be the principals to the contemplated contract. They may be servants or agents with limited authority. The message may not reach, or be intended to reach, the designated recipient immediately: messages may be sent out of office hours, or at night, with the intention, or on the assumption that they will be read at a later time. There may be some error or default at the recipient’s end which prevents receipt at the time contemplated and believed in by the sender. The message may have been sent and/or received through machines operated by third persons. And many other variants may occur. 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 judgement where the risks should lie.