The question for the court in Adams v Lindsell was therefore whether a contract of sale had been entered into before 8 September when the wool was sold to the third party. If the acceptance was effective when it arrived at the address or when the defendant saw it, then no contract would have been made and the sale to the third party would amount to revocation of the offer. However, the court held that the offer had been accepted as soon as the letter had been posted.
In Adams v Lindsell there was a contract in existed before the sale of the wool to the third party, even though the letter had not actually been received by the defendant. The defendant was therefore liable in breach of contract.
There is nothing as in Henshaw V Fraser (1892) CH where the defendant made and offer to purchase within fourteen days. The claimant responded to the offer with acceptance the next day mail. The defendant tried to withdraw the offer before receiving acceptance, but after acceptance was posted. Acceptance is complete, as soon as it’s posted. The offerer expects an acceptance by comparable means. This suggests that the postal rules should not apply. The use of the post is most clearly within the contemplation of the parties. The postal rules state that the letter must be properly posted and addressed David’s offer was by post however David misaddressed the envelope therefore his offer is not valid.
However the same postal rules apply to Andrea when she decides to accept Bernice’s offer and posts a letter of acceptance. However it is not clear whether it was addressed properly. Therefore we will assume that it was addressed and posted correctly. This means that Andrea has made a clear letter of acceptance and therefore the car is Bernice’s.
When Andrea gets home at 9.30pm on Monday and sees Curtis offer for £4750 and telephones. Andres leaves a message on the answer phone. There is no precise authority on the communication of fax messages. However in Brinkibon v Stahag Stahl (1983) 2 AC 34 Brinkibon was a London company that purchased steel from Stahag, a seller based in Austria. Brinkibon sent their acceptance to a Stahag offer by Telex to Vienna.
Brinkibon later wanted to issue a writ against Stahag and applied serve an out of jurisdiction party. They would only be able to do so if the contract had been formed in England. The question at issue was where the contract was formed. Lord Wilberforce said: "Since 1955 the use of Telex communication has been greatly expanded, and there are many different on it. The senders and recipients may not be the principals to the considering 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."
They accepted the principle in Entores v Miles Far East Co where in the case of instantaneous communication, which included telex, the formation occurs in the place where the acceptance is received. Further it appears from Entroes LTD V Miles Far East Corporation 1955 2 QB 327 where Entores was a London-based trading company that sent an offer for the purchase of copper cathodes by telex from a company based in Amsterdam. The Dutch company sent an acceptance by telex.
The contract was not fulfilled and so Entores attempted to sue the owner of the Dutch company for damages. Denning LJ, delivering the leading judgment He said that the postal rule could not apply to immediate communications, such as telephone or telex: if a phone line "went dead" just before the offeree said "yes", it would be ridiculous to assume that the contract was formed and the parties would not have to call each other back. The same applied to telex. Since the contract was therefore only formed when and where the telex was received, the place of formation was London. It appears that instantaneous communications such as the telephone the acceptance is only communicated when it is actually heard.
If the paper failure can be attributed to fault on the part of Ben then again following the principle stated in Entores Ltd V Miles far eastern corporation, Andrea would be bound because as Denning LJ stated he would be estopped from saying that she did not receive the message. If this is correct the offeror without any fault on his part does not receive the message of acceptance.
In the Brimnes (1975) QB 929The defendants hired a ship from the plaintiff, who were ship-owners. The ship-owners complained of a breach of contract. The ship-owners sent a message by Telex, withdrawing the ship from service, between 17.30 and 18.00 on 2 April.
However, this was not until the following morning that the defendants saw the message of withdrawal on the machine. It was held that the notice of withdrawal was sent during ordinary business hours. Thus the charterers' staff had left the office on April 2 'well before the end of ordinary business hours' or that if they were indeed there, they 'neglected to pay attention to the Telex machine in the way they claimed it was their ordinary practice to do.' It was therefore concluded that the withdrawal Telex must be regarded as having been received at 17.45 and that the withdrawal was effected at that time.
However the principle may well be applicable and if this is the case then Bernice would be deemed to have received Andrea’s message. Alternatively this cannot be the case as they said that if Andréa does not contact Bernice before 9.00pm then she has accepted the offer. Andrea rang Bernice at 9.30pm which means that Andrea cannot revoke the offer. It is not enough for the offeror simply to change his or her mind about the offer; they must notify the offeree that it is being revoked.
In Byrne v. Van Tienhoven(1880), 5 C.P.D. 344 Defendants mailed offer to sell tin plates to Plaintiffs on October 1. Offer was received by Plaintiffs on October 11 and immediately accepted via telegram on the same day; acceptance was confirmed by Plaintiffs by letter on October 15. Defendant mailed a revocation of offer on October 8, which was received by Plaintiffs on October 20, after Plaintiffs had already made assurances to sell the tin plates to another party. Plaintiffs brought action against Defendant for breach of contract and failure to deliver.
Therefore the issue here is that the acceptance has already taken place. Lindley J determined a withdrawal of offer to have no effect until the other party was deemed to have been notified of the withdrawal. A revocation uncommunicated is no revocation at all.
Since no authority was given in fact to the defendants by the plaintiffs to notify of withdrawal of offer by post, the revocation sent by Defendants of 8th October is not to be considered as communicated to Plaintiffs before the date of receipt by Plaintiffs, 20th October. The withdrawal has no effect, and therefore a binding contract was entered into on 11th October when Plaintiffs accepted the offer.
After discussing the law above the parties should be advised that a contract has come into being at £4500. The contract was made between Andrea and Bernice. Andrea would have preferred to make a contract for £4,750 with Curtis however she had already sent a letter of acceptance to Bernice before she saw the other two offers. As Andrea had already sent the letter of acceptance she cannot revoke the offer as the postal rules state: – the acceptance is communicated as soon as the letter of acceptance is posted and remains effective even if the letter is then lost, delayed or destroyed.