Entores Ltd v Miles Far East Corp (1955) - OFFER & ACCEPTANCE: Communication of Acceptance

'The normal rule: Acceptance must be communicated to the offeror'

An English company received a telex offer from a Dutch company and made a counter-offer, which the Dutch company accepted by telex. The English company needed to establish that the contract was made within the English jurisdiction.

Held: Since the acceptance was received in England, the contract was made within the jurisdiction.

DENNING LJ: Let me first consider a case where two people make a contract by word of mouth in the presence of one another. 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 ...

Now take a case where two people make a contract by telephone. Suppose, for instance, that I make an offer to a man by telephone and, in the middle of his reply, the line goes 'dead' so that I do not hear his words of acceptance. There is no contract at that moment. The other man may not know the precise moment when the line failed. But he will know that the telephone conversation was abruptly broken off: because people usually say something to signify the end of the conversation.

If he wishes to make a contract, he must therefore get through again so as to make sure that I heard. Suppose next, that the line does not go dead, but it is nevertheless so indistinct that I do not catch what he says and I ask him to repeat it. He then repeats it and I hear his acceptance. The contract is made, not on the first time…