Brinkibon Ltd v Stahag Stahl GmbH [1983] 2 AC 34

Court: House of Lords

Facts: Brinkibon Ltd, a company based in London, engaged in a steel transaction with Stahag Stahl GmbH, based in Vienna, Austria. Brinkibon sent a telex to Stahag Stahl in Vienna to communicate acceptance of the offer. When Brinkibon sought to serve an out-of-jurisdiction party, it became necessary to determine where the contract was formed, as English law only permitted such service if the contract was formed in England.

Issue: Was the contract formed in England (where the acceptance was sent) or in Austria (where the acceptance was received), and thus, could Brinkibon serve the defendant under English jurisdiction?

Held: The House of Lords held that the contract was formed in Vienna, where the acceptance was received. The court reaffirmed the principle in Entores v Miles Far East that for instantaneous communications, the contract is formed where and when the acceptance is received. Therefore, the High Court in England did not have jurisdiction over the case.

Key Judicial Statement: Lord Wilberforce stated that the general rule is that a contract is made when and where the acceptance is received if communication is instantaneous, with the exception of the postal rule.

💡Leveluplaw: This case reaffirms that for instantaneous communications like telex, the contract is formed at the place where the acceptance is received, not where it is sent. However, Lord Wilberforce also highlighted that there is no universal rule that applies to all situations involving modern communication. Exceptions may arise based on the intentions of the parties and sound business practices, especially when errors or delays occur on the offeror’s end