The Case

 

The claimant sent a telex message from England offering to purchase 100 tons of Cathodes from the defendants in Holland. The defendant sent back a telex from Holland to the London office accepting that offer. The question for the court was at what point the contract came into existence. If the acceptance was effective from the time the telex was sent the contract was made in Holland and Dutch law would apply. If the acceptance took place when the telex was received in London then the contract would be governed by English law.

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Held (The Judgement)

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The rule about instantaneous communications between the parties is different from the rule about the post. The contract is only complete when the acceptance is received by the offeror; and the contract is made at the place where the acceptance is received. Thus, in the case of telex communications, the place where the contract is made is the place where the offeror receives the notification of the acceptance by the offeree. Therefore the contract was made in England, and English law applied in relation to the contract.

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