Brinkibon Ltd v Stahag Stahl und Stahlwarenhandelsgesellschaft mbH [1983] 2 AC 34
Contract; formation; agreement; acceptance by telex.
Facts: Brinkibon, a company based in London, England wished to purchase steel from Stahag, a company based in Vienna, Austria. In the course of negotiating their contract, a number of telexes were exchanged by the parties. One of these telexes, sent by Brinkibon to Stahag, constituted the acceptance of an offer from Stahag. Some time thereafter a dispute between the parties arose and, for procedural reasons, it became important to determine whether the contract for the purchase of the steel had been made in England or in Austria.
Issue: In the case of an acceptance sent by telex from London and received in Vienna, where was the contract made?
Decision: The acceptance took effect when the telex was received by Stahag in Vienna. The contract was therefore made in Vienna.
Reason: Lord Wilberforce said (at 296):
"Since 1955 the use of telex communications has been greatly expanded... The senders and recipients may not be the principals to the contemplated contract... 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 or believed in by the sender... No universal rule can cover all such cases... The present case is...the simple case of instantaneous communication between principals, and, in accordance with the general rule, involves that the contract (if any) was made when and where the acceptance was received..."