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[1983] 2 A.C. 34 Page 1 [1983] 2 A.C. 34 [1982] 2 W.L.R. 264 [1982] 1 All E.R. 293 [1982] 1 Lloyd's Rep. 217 [1982] Com. L.R. 72 [1982] E.C.C. 322 (1982) 126 S.J. 116 [1983] 2 A.C. 34 [1982] 2 W.L.R. 264 [1982] 1 All E.R. 293 [1982] 1 Lloyd's Rep. 217 [1982] Com. L.R. 72 [1982] E.C.C. 322 (1982) 126 S.J. 116 (Cite as: [1983] 2 A.C. 34)

Brinkibon v Stahag Stahl und Stahlwarenhandels GmbH [1982] 2 W.L.R. 264 House of Lords Lord Wilberforce, Lord Fraser of Tullybelton, Lord Russell of Killowen, Lord Bridge of Harwich, and Lord Brandon of Oakbrook 1981 Nov. 18, 19; 1982 Jan. 21 ContractFormationOffer and acceptanceTelex communication from London to ViennaAlleged breach of contractWhere contract madeService of writ out of jurisdictionR.S.C., Ord. 11, r. 1 (1) (f) (g) B. an English company, sought leave under R.S.C., Ord. 11, r. 1 (1) to issue a writ against S., an Austrian company, and serve notice of it on them in Austria. The proposed action was for breach of a contract which was made (if at all) either by a telex communication from B. in London to S. in Vienna, accepting a counter-offer made by S., or else by acceptance of the counter-offer by conduct in instructions given by B. to their bankers in the United Kingdom to open a letter of credit in Switzerland in favour of S. Further, it was alleged that there had been repudiation and breach of contract by S. within the jurisdiction. Mocatta J. held that the contract had been "made within the jurisdiction" within R.S.C., Ord. 11, r. 1 (1) (f) and gave leave thereunder but refused leave under paragraph (g) on the ground that the breach and repudiation occurred in Austria. The Court of Appeal, holding that the contract was made in Austria, reversed his decision to grant leave. On appeal by B.:dismissing the appeal, that the acceptance by telex from London to Vienna caused the contract to be made in Vienna since, according to the general

rule, instantaneous communication between principals involved that the contract (if any) was made when and where the acceptance was received (post, pp. 41B-E, H - 42A, 43E-F, 48F-H). Entores Ltd. v. Miles Far East Corporation [1955] 2 Q.B. 327 , C.A. applied. Per curiam. In telex communications the senders and recipients may not be the principals to the contemplated contract. They may be servants or agents with limited authority. The message may not reach, or be intended to reach, the designated recipient immediately; it may be sent out of office hours or at night on the assumption that it will be read at a later time. Error or default at the recipient's end may prevent receipt at the time contemplated and believed in by the sender. The message may be sent and/or received through machines operated by third persons. No universal rule can cover all such cases, which must be resolved by reference to the intentions of the parties, sound business practice and in some cases by a judgment where the risks should lie (post, pp. 42B-D, 43H - 44B, 50C-D). further, that the steps taken by B. to set up a letter of credit did not amount to acceptance of the counter-offer*35 within the jurisdiction (post, pp. 42G-H, 47H - 48A); and that the alleged breach relied on occurred outside the jurisdiction (post, pp. 43A, 50A). Decision of the Court of Appeal [1980] 2 Lloyd's Rep. 556 affirmed. The following cases are referred to in their Lordships' opinions: Adams v. Lindsell (1818) 1 B. &; Ald. 681 . Carlill v. Carbolic Smoke Ball Co. [1893] 1 Q.B. 256, C.A. . Entores Ltd. v. Miles Far East Corporation [1955] 2 Q.B. 327; [1955] 3 W.L.R. 48; [1955] 2 All E.R. 493, C.A. .

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[1983] 2 A.C. 34 Page 2 [1983] 2 A.C. 34 [1982] 2 W.L.R. 264 [1982] 1 All E.R. 293 [1982] 1 Lloyd's Rep. 217 [1982] Com. L.R. 72 [1982] E.C.C. 322 (1982) 126 S.J. 116 [1983] 2 A.C. 34 [1982] 2 W.L.R. 264 [1982] 1 All E.R. 293 [1982] 1 Lloyd's Rep. 217 [1982] Com. L.R. 72 [1982] E.C.C. 322 (1982) 126 S.J. 116 (Cite as: [1983] 2 A.C. 34)

Henthorn v. Fraser [1892] 2 Ch. 27, C.A. . Household Fire and Carriage Accident Insurance Co. Ltd. v. Grant (1879) 4 Ex.D. 216, C.A. . Imperial Land Co. of Marseilles, In re (Harris' Case) (1872) L.R. 7 Ch.App. 587 . The following additional cases were cited in argument: Bennett v. Cosgriff (1878) 38 L.T. 177 . Brimnes, The [1973] 1 W.L.R. 386; [1973] 1 All E.R. 769 ; [1975] Q.B. 929; [1974] 3 W.L.R. 613; [1974] 3 All E.R. 88, C.A. . Cowan v. O'Connor (1888) 20 Q.B.D. 640, D.C. . Dunlop v. Higgins (1848) 1 H.L.Cas. 381 , H.L.(Sc.). Evans v. Nicholson (No. 2) (1875) 32 L.T. 778 . Inland Revenue Commissioners v. Muller & Co.'s Margarine Ltd. [1901] A.C. 217 , H.L.(E.). Joseph v. Krull Wholesale Drug Co. (1956) 147 F.Supp. 250 . Martin v. Stout [1925] A.C. 359, P.C. . Newcomb v. De Roos (1859) 2 El. &; El. 271 . Tel Peda Investigation Bureau (Pty.) Ltd. v. Van Zyl, 1965 (4) S.A. 475 . United States v. Bushwick Mills Inc. (1947) 165 F. 2d 198 . APPEAL from the Court of Appeal. This was an appeal by the appellants, Brinkibon Ltd., by leave of the House of Lords from an order of the Court of Appeal (Stephenson and Templeman L.JJ.) dated June 12, 1980, reversing a decision of Mocatta J. dated March 11, 1980, discharging an order of Robert Goff J. dated November 30, 1979, whereby leave had been granted to the appellants, to serve notice of a writ on the respondents, Stahag Stahl und Stahlwarenhandelsgesellschaft m.b.H., in Austria under the provisions of R.S.C., Ord. 11, r. 1 (1) (f) and (g) on the grounds that a contract between the parties had been made in England and further that a breach of the contract had occurred in England. The appellants contended that, by sending telexes from Austria to England the respondents had so

acted as to confer jurisdiction on the English court under R.S.C., Ord. 11, r. 1 (1) . In the first place they contended that the respondents concluded a contract in England by a telex of acceptance sent from Austria thereby confirming jurisdiction pursuant to rule 1 (1) (f) . In the second place they contended that the respondents broke the contract in England by a telex of renunciation sent from Austria, thereby confirming jurisdiction pursuant to rule 1 (1) (g) . This appeal raised the question of the circumstances in which the English court can*36 properly assume jurisdiction over a foreign defendant in an action based on a contract made or renounced by telex. This involved consideration both of the letter and of the spirit of the relevant provisions of rule 1 (1) . The facts are stated in the opinions of Lord Wilberforce and Lord Brandon of Oakbrook. Anthony Thompson Q.C. and Alastair MacGregor for the appellants. The accepted practice is that in the making of a contract it comes into existence when one party communicates to the other acceptance of an offer. If an offer is accepted by letter or by telegram, the place where the letter is posted or the telegram handed in is the place of the making of the contract. This rule is sometimes unsatisfactory. If the acceptance is oral or by telex the contract is made at the place where the words are heard or the telex is received. As to the breaking of a contract different rules apply. There is no authority as to repudiation by telephone. Telex at present would seem to follow the oral inter praesentes rule so far as the making of a contract is concerned. The English, Scottish, Canadian, Australian and American decisions are at variance. The old rules as to the making of a contract came into force before telephones. There should be one basic rule, simple, certain and admitting no exceptions, i.e. that, when the parties are apart, the contract should be made in both places where they are. Alternatively, if the courts will not go that far, the contract should be taken to be made where the acceptor is, irrespective of the means of communication employed. In

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[1983] 2 A.C. 34 Page 3 [1983] 2 A.C. 34 [1982] 2 W.L.R. 264 [1982] 1 All E.R. 293 [1982] 1 Lloyd's Rep. 217 [1982] Com. L.R. 72 [1982] E.C.C. 322 (1982) 126 S.J. 116 [1983] 2 A.C. 34 [1982] 2 W.L.R. 264 [1982] 1 All E.R. 293 [1982] 1 Lloyd's Rep. 217 [1982] Com. L.R. 72 [1982] E.C.C. 322 (1982) 126 S.J. 116 (Cite as: [1983] 2 A.C. 34)

the further alternative the House of Lords should reverse Entores Ltd. v. Miles Far East Corporation [1955] 2 Q.B. 327 and bring telex into line with letters and cables. That case is based on false premises as to the realities of telex communications and the law as to contracts inter praesentes. Contracts were originally made by persons in one place or by their authorised agents. The postal rule developed to meet the case of communications at a distance: Adams v. Lindsell (1818) 1 B. & Ald. 681 , a decision as to point of time. It is artificial to distinguish point of time from the place of making the contract. In the case of posting the law is well established that the contract is made when the letter of acceptance is posted. But where the reality of the situation is that the contract was made in two places it should be so held, e.g. in the case of a telephone conversation. The decision in Dunlop v. Higgins (1848) 1 H.L.Cas. 381 is not challenged though it creates some difficulties, sometimes leaving the offeror in doubt as to whether there has been an acceptance. In Cowan v. O'Connor (1888) 20 Q.B.D. 640 , 641, 642, the postal rule was extended to telegrams, the time of making the contract being equated with the place. The appellants do not challenge that decision as regards time but they do challenge it as regards place. In the Entores case [1955] 2 Q.B. 327 , 331-332, 335, a distinction was drawn between instantaneous and non-instantaneous modes of communication, and communications by telephone and telex were treated as instantaneous so that a contract made thereby was inter praesentes, but that is a misapplication of the inter praesentes rule. Communications by telex are not analogous to inter praesentes. When two businesses are dealing by telex the people contracting would not be the people tapping out the communications. Instructions are given by*37 secretaries to the telex operators. In the case of a telex communication between London and Hong Kong the office at Hong Kong might well be shut when the message arrived, so that the situation is much closer to communication by letter, a very fast letter. Telex communications are quite differ-

ent from word of mouth communications. Though a telex message goes instantly to the machine, the person with authority to contract will not be standing beside it to receive the communication. It is pure fiction to treat a telex communication as though the parties were in each other's presence. Even if it be so treated, the law in 1955 was not as stated in the Entores case [1955] 2 Q.B. 327 in relation to inter praesenter contracts. The telephone comes far closer to the parties being in each other's presence, but it is not really so. For example, there are answering devices for recording messages. The common law rule is that where the parties are apart acceptance is at the place where the acceptor stood. At p. 332 Denning L.J. refused to follow Newcomb v. De Roos (1859) 2 El. & El. 271 , 274. In the United States the view has been expressed that there is no "resemblance between communication by mail and by telephone or teletape": Williston on Contracts, 3rd ed. (1957), para. 82A, pp. 270-273. See also Corpus Juris Secundum, vol. 17A (1963), ss. 355-356; United States v. Bushwick Mills Inc. (1947) 165 F. 2d 198 , 202 and Joseph v. Krull Wholesale Drug Co. (1956) 147 F.Supp. 250 , 253-254. In South Africa see Tel Peda Investigation Bureau (Pty.) Ltd. v. Van Zyl, 1965 (4) S.A. 475 in which the Entores case [1955] 2 Q.B. 327 was followed. A contract may be made in two places at once: Evans v. Nicholson (No. 2) (1875) 32 L.T. 778 , 779-780 and Bennett v. Cosgriff (1878) 38 L.T. 177 . Reliance is placed on Inland Revenue Commissioners v. Muller & Co.'s Margarine Ltd. [1901] A.C. 217 , 222-223 as to where the contract was made. If it is too great a leap to say that this contract was made in both places, then the place is where the acceptor was when he uttered his acceptance. The situation does not change according to whether it is accepted by telex, letter or telephone. The acceptor's situation should not change according to the means of communication

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[1983] 2 A.C. 34 Page 4 [1983] 2 A.C. 34 [1982] 2 W.L.R. 264 [1982] 1 All E.R. 293 [1982] 1 Lloyd's Rep. 217 [1982] Com. L.R. 72 [1982] E.C.C. 322 (1982) 126 S.J. 116 [1983] 2 A.C. 34 [1982] 2 W.L.R. 264 [1982] 1 All E.R. 293 [1982] 1 Lloyd's Rep. 217 [1982] Com. L.R. 72 [1982] E.C.C. 322 (1982) 126 S.J. 116 (Cite as: [1983] 2 A.C. 34)

which he chooses. Acceptance by telephone should follow the rule with regard to letters. When an acceptance is spoken, it operates from the place where it is spoken. The opening of the letter of credit operated as an acceptance. In cases of delivery of goods as soon as they were put in line for delivery that was enough to constitute acceptance. Nicholas Phillips Q.C. and Martin White for the respondents. A contract is made in the place where it is concluded, i.e. where that occurs which converts negotiations into a binding agreement. On that point the appellants failed to discharge the burden of proof. They relied on two telexes as constituting offer and acceptance. Neither the trial judge nor the Court of Appeal accepted this. The only way the appellants can establish that a contract was concluded as they suggest without a change in the law is to contend that the respondent's telex of May 3, 1979, was an offer that could be accepted by conduct without the need of communication by the acceptor. There can*38 be such a unilateral contract as in Carlill v. Carbolic Smoke Ball Co. [1893] 1 Q.B. 256 . The Court of Appeal held that the telex of May 3, 1979, did not constitute such an offer as was contended. If it is to be read as a counter offer acceptance of which did not need to be communicated, acceptance would be the opening of the letter of credit. For that one would have to obtain a binding obligation on the part of the bank to the beneficiary. But that would not operate till the bank issuing it advised the beneficiary or his agent. It is the act of so advising that binds the bank to perform its part. Till then the beneficiary has nothing; all that has happened so far is preliminary. Events may happen which delay or prevent the beneficiary from receiving the letter of credit. Giving instructions to the bank is not acceptance; it is only evidence of our intention to accept. The decision in the Entores case [1955] 2 Q.B.

327 that in the case of a telex communication acceptance was when and where it was received has been generally accepted, e.g. in South Africa. It is the only English decision on this point and has not been considered vulnerable in principle or objectionable in practice. It is in accordance with business efficiency. The basic principle is that a binding contract does not come into existence till an offer is accepted. Acceptance requires communication. That makes obvious common sense. The parties should not reasonably be bound until they are both aware that they are ad idem. Special features arise in the case of communication by post and telegram, but it is hard to find the principle underlying the postal exception to the general rule, which emerged pragmatically: see Treitel, The Law of Contract, 5th ed. (1979), pp. 18-19; Chitty on Contracts, 24th ed. (1977), paras. 62-64, pp. 32-34, and Henthorn v. Fraser [1892] 2 Ch. 27 , 31-33. In the Entores case [1955] 2 Q.B. 327 , 329-330 the submission of counsel for the defendant must not be taken to have been upheld as a general principle. In general a contract is made when and where acceptance of an offer is communicated to the offeror. When the acceptance is by post or telegram the contract is concluded when and where the letter is posted or the telegram handed to the post office: Adams v. Lindsell, 1 B. & Ald. 681 , 683. See also Dunlop v. Higgins, 1 H.L.Cas. 381 , 384, 397, where the issue was whether there had been undue delay in acceptance. But the decision in Entores [1955] 2 Q.B. 327 should be upheld in that it is no departure from the relevant common law rule that acceptance in order to be accepted must be communicated. The postal rule developed by accident pragmatically and is an exception to the common law rule. It should not be applied to telex. See also In re Imperial Land Co. of Marseilles (Harris' Case) (1872) L.R. 7 Ch. App. 587 , 594; Household Fire and Carriage Accident Insurance Co. Ltd. v. Grant (1879) 4 Ex.D. 216 , 227-228, and Henthorn v. Fraser [1892] 2 Ch. 27 . The postal rule came into being because the courts had to grapple with problems of offer and acceptance by post which must take some

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[1983] 2 A.C. 34 Page 5 [1983] 2 A.C. 34 [1982] 2 W.L.R. 264 [1982] 1 All E.R. 293 [1982] 1 Lloyd's Rep. 217 [1982] Com. L.R. 72 [1982] E.C.C. 322 (1982) 126 S.J. 116 [1983] 2 A.C. 34 [1982] 2 W.L.R. 264 [1982] 1 All E.R. 293 [1982] 1 Lloyd's Rep. 217 [1982] Com. L.R. 72 [1982] E.C.C. 322 (1982) 126 S.J. 116 (Cite as: [1983] 2 A.C. 34)

time in transmission. It prevents commercial men from blowing hot and cold. The telex is a mechanical agent on its own. It is like putting a clerk beside the telephone to take any messages; communications to him are communications to his employer. So communication by telex*39 is notification to the offeror, because the telex is an instantaneous method of communication. Reliance is placed on The Brimnes [1973] 1 W.L.R. 386 , 404-405; [1975] Q.B. 929 , 945, 966, 967, 969-970. Difficult questions may arise when a telex is left on to take messages outside working hours. Such cases would have to be dealt with on their own particular facts. The Entores case [1955] 2 Q.B. 327 was rightly decided and it should not be upset now. Thompson Q.C. in reply. The decision in the Entores case [1955] 2 Q.B. 327 was based on the false premise that to constitute a contract the acceptance must be received by the offeror, whereas it is only necessary that it should be dispatched by the acceptor. If he takes appropriate steps to communicate his acceptance to the offeror, then, unless the offeror has specified that acceptance must be brought to his attention, taking those appropriate steps is sufficient. In Adams v. Lindsell, 1 B. & Ald. 681 , 682-683, the court was merely establishing the time of acceptance and did not suggest that the postal rule was a derogation from the general rule. This decision was followed and approved in Dunlop v. Higgins, 1 H.L.Cas. 381 , again with no suggestion that it was an exception to the general rule. Nothing in In re Imperial Land Co. of Marseilles, L.R. 7 Ch.App. 587 , suggests that the postal rule is an exception. If an offer to buy goods in London was sent from Hong Kong to an English company which sent a telex acceptance to a branch office of the offerors, it could not be said that the contract was not complete until the acceptance was received in Hong Kong. If in the case of a telex message the onus was on the acceptor to show that the offeror had received the acceptance, the same difficulties would apply as in the case of acceptance by letter and there

would be a duty to accept by registered letter or recorded delivery. There is no duty to accept by any means other than those contemplated by the parties. Reliance is placed on the Household Firecase, 4 Ex.D. 216 , 220-221, 223-224, and Carlill v. Carbolic Smoke Ball Co. [1893] 1 Q.B. 256 , 262. The giving of the notice is the binding acceptance. The time of the contract is the time when the notice is given. The place where the notice is given is the place where the contract is completed. The contract becomes binding on the transmitting of the acceptance. A postal contract is complete when the letter is posted. It was wrong to say in the Entores case [1955] 2 Q.B. 327 that the contract is made where the words of acceptance are heard. As to repudiation of the contract the relevant words in R.S.C., Ord. 11, r. 1 (1) (g) , are "breach committed within the jurisdiction ..." Repudiation is an intention not to perform the contract. The proper test is: When does the repudiation take effect? If the rule in Entores [1955] 2 Q.B. 327 is upheld this repudiation took effect when notice of it was received in England. The repudiation is without effect until communicated to the innocent party. Martin v. Stout [1925] A.C. 359 should not be followed. A repudiation may be looked at either as a wrongful act or as an offer open to acceptance. In either case it should be regarded as taking place where it is communicated. With regard to this acceptance, if the telex of May 3, 1979, was a*40 counter-offer to the appellants and was accepted by the opening of the letter of credit a question arises as to the place of that contract. The procedure followed takes account of the fact that the vendor wants to be sure that he will be paid and the purchaser causes letters of credit to be opened, applying to his bank who communicate with the corresponding bank by whom the vendor will be paid. The buyer instructs the issuing bank to open a credit in favour of the seller while the bank approached advises the seller that the credit has been issued. Here there was an opening of credit by the issuing

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[1983] 2 A.C. 34 Page 6 [1983] 2 A.C. 34 [1982] 2 W.L.R. 264 [1982] 1 All E.R. 293 [1982] 1 Lloyd's Rep. 217 [1982] Com. L.R. 72 [1982] E.C.C. 322 (1982) 126 S.J. 116 [1983] 2 A.C. 34 [1982] 2 W.L.R. 264 [1982] 1 All E.R. 293 [1982] 1 Lloyd's Rep. 217 [1982] Com. L.R. 72 [1982] E.C.C. 322 (1982) 126 S.J. 116 (Cite as: [1983] 2 A.C. 34)

bank on the instructions of the purchaser. An irrevocable step was taken by the purchaser when he gave his instructions in London. In the case, say, of a sale of wine the moment when the contract is complete is when the wine merchant despatches it. Similarly in the present case when instructions were given to the bank to issue the letters of credit, that was acceptance of the offer. A further telex saying that the letters of credit had been issued was irrelevant: see the Entores case [1955] 2 Q.B. 327 , 334. The respondents were not called on to reply to this last point. Their Lordships took time for consideration. January 21, 1982. LORD WILBERFORCE. My Lords, the appellants desire to sue in this country the respondents, an Austrian company, for breach of an alleged contract for the supply of steel. In order to do so, they must obtain leave to serve notice of their writ upon the respondents under one or other of the provisions of R.S.C., Ord. 11, r. 1 (1) . Those relied upon are paragraphs (f) and (g). To satisfy (f), the appellants must show that the contract was "made within the jurisdiction"; to come within (g) they must establish that the action is in respect of a breach committed within the jurisdiction. The Court of Appeal has decided against the appellants under both paragraphs. The question whether a contract was made within the jurisdiction will often admit of a simple answer: if both parties are in England at the time of making it, or if it is contained in a single document signed by both parties in England, there is no difficulty. But in the case of contracts involving negotiations, where one party is abroad, the answer may be difficult to find. Sophisticated analysis may be required to decide when the last counter-offer was made into a contract by acceptance, or at what point a clear consensus was reached and by virtue of what words spoken or of what conduct. In the case of successive telephone conversations it may indeed be most artificial to ask where the contract was made: if one asked the

parties, they might say they did not know - or care. The place of making a contract is usually irrelevant as regards validity, or interpretation, or enforcement. Unfortunately it remains in Order 11 as a test for purposes of jurisdiction, and courts have to do their best with it. In the present case it seems that if there was a contract (a question which can only be decided at the trial), it was preceded by and possibly formed by a number of telephone conversations and telexes between London and Vienna. and there are a number of possible combinations*41 upon which reliance can be placed. At this stage we must take the alternatives which provide reasonable evidence of a contract in order to see if the test is satisfied. There are two: (i) A telex dated May 3, 1979, from the respondents in Vienna, said to amount to a counter-offer, followed by a telex from the appellants in London to the respondents in Vienna dated May 4, 1979, said to amount to an acceptance. (ii) The above telex dated May 3, 1979, from the respondents followed by action, by way of opening a letter of credit, said to have amounted to an acceptance by conduct. The first of these alternatives neatly raises the question whether an acceptance by telex sent from London but received in Vienna causes a contract to be made in London, or in Vienna. If the acceptance had been sent by post, or by telegram, then, on existing authorities, it would have been complete when put into the hands of the post office - in London. If on the other hand it had been telephoned, it would have been complete when heard by the offeror - in Vienna. So in which category is a telex communication to be placed? Existing authority of the Court of Appeal decides in favour of the latter category, i.e. a telex is to be assimilated to other methods of instantaneous communication: see Entores Ltd. v. Miles Far East Corporation [1955] 2 Q.B. 327 . The appellants ask that this case, which has stood for 30 years, should now be reviewed. Now such review as is necessary must be made against the background of the law as to the making of contracts. The general rule, it is hardly ne-

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[1983] 2 A.C. 34 Page 7 [1983] 2 A.C. 34 [1982] 2 W.L.R. 264 [1982] 1 All E.R. 293 [1982] 1 Lloyd's Rep. 217 [1982] Com. L.R. 72 [1982] E.C.C. 322 (1982) 126 S.J. 116 [1983] 2 A.C. 34 [1982] 2 W.L.R. 264 [1982] 1 All E.R. 293 [1982] 1 Lloyd's Rep. 217 [1982] Com. L.R. 72 [1982] E.C.C. 322 (1982) 126 S.J. 116 (Cite as: [1983] 2 A.C. 34)

cessary to state, is that a contract is formed when acceptance of an offer is communicated by the offeree to the offeror. and if it is necessary to determine where a contract is formed (as to which I have already commented) it appears logical that this should be at the place where acceptance is communicated to the offeror. In the common case of contracts, whether oral or in writing inter praesentes, there is no difficulty; and again logic demands that even where there is not mutual presence at the same place and at the same time, if communication is instantaneous, for example by telephone or radio communication, the same result should follow. Then there is the case - very common - of communication at a distance, to meet which the so called "postal rule" has developed. I need not trace its history: it has firmly been in the law at least since Adams v. Lindsell (1818) 1 B. & Ald. 681 . The rationale for it, if left somewhat obscure by Lord Ellenborough C.J., has since been well explained. Mellish L.J. in In re Imperial Land Co. of Marseilles (Harris' Case) (1872) L.R. 7 Ch.App. 587 , 594 ascribed it to the extraordinary and mischievous consequences which would follow if it were held that an offer might be revoked at any time until the letter accepting it had been actually received: and its foundation in convenience was restated by Thesiger L.J. in Household Fire and Carriage Accident Insurance Co. Ltd. v. Grant (1879) 4 Ex.D. 216 , 223. In these cases too it seems logical to say that the place, as well as the time, of acceptance should be where (as when ) the acceptance is put into the charge of the post office. In this situation, with a general rule covering instantaneous communication inter praesentes, or at a distance, with an exception applying to*42 noninstantaneous communication at a distance, how should communications by telex be categorised? In Entores Ltd. v. Miles Far East Corporation [1955] 2 Q.B. 327 the Court of Appeal classified them with instantaneous communications. Their ruling, which has passed into the textbooks, including Williston on Contracts, 3rd ed. (1957),

appears not to have caused either adverse comment, or any difficulty to business men. I would accept it as a general rule. Where the condition of simultaneity is met, and where it appears to be within the mutual intention of the parties that contractual exchanges should take place in this way, I think it a sound rule, but not necessarily a universal rule. Since 1955 the use of telex communication has been greatly expanded, and there are many variants on it. The senders and recipients may not be the principals to the contemplated 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 upon 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 variations 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 judgment where the risks should lie: see Household Fire and Carriage Accident Insurance Co. Ltd. v. Grant, 4 Ex.D. 216 , 227 per Baggallay L.J. and Henthorn v. Fraser [1892] 2 Ch. 27per Lord Herschell. The present case is, as Entores Ltd. v. Miles Far East Corporation [1955] 2 Q.B. 327 itself, 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. This was on May 4, 1979, in Vienna. The alternative argument under this head was that the contract was made by an offer made from Vienna (as above, on May 3, 1979) and an acceptance by conduct in the United Kingdom. The conduct relied upon was the giving of instructions by the appellants to set up a letter of credit, as requested in the respondents' telex of May 3, 1979.

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[1983] 2 A.C. 34 Page 8 [1983] 2 A.C. 34 [1982] 2 W.L.R. 264 [1982] 1 All E.R. 293 [1982] 1 Lloyd's Rep. 217 [1982] Com. L.R. 72 [1982] E.C.C. 322 (1982) 126 S.J. 116 [1983] 2 A.C. 34 [1982] 2 W.L.R. 264 [1982] 1 All E.R. 293 [1982] 1 Lloyd's Rep. 217 [1982] Com. L.R. 72 [1982] E.C.C. 322 (1982) 126 S.J. 116 (Cite as: [1983] 2 A.C. 34)

The appellants' telex of May 4, 1979, opened with the words "confirm having opened our irrevocable letter of credit No. 0761/79 on account of Mide-strade Est., Chiasso, Switzerland ..." Midestrade Est. is, it appears, the company behind the appellants - a fact which raises the question whether a letter of credit on their account satisfied the terms of the respondents' request. I need not come to a conclusion on this point because I am satisfied that the letter of credit was not opened in the United Kingdom. Instructions were indeed given by the appellants to their bank in the United Kingdom to open it, and that bank gave instructions on May 4, 1979, to their correspondent in Vienna, but these steps were between the appellants and their agents only. They could not amount, in my opinion, to an acceptance of the offer of May 3, 1979. This took place, if at all, when the correspondent bank in Vienna notified the respondents: this they did in Vienna. On neither ground, therefore, can it be said*43 that the contract was made within the jurisdiction and the case under subparagraph (f) must fail. That under subparagraph (g) can be more shortly dealt with. The breach pleaded is that the defendants (respondents) "have not opened a performance bond and have delivered no steel" (points of claim paragraph 7). Each of these acts should have been performed outside the jurisdiction and failure to do them must be similarly located. On both points, therefore, I find myself in agreement with the Court of Appeal, and the appeal must be dismissed. LORD FRASER OF TULLYBELTON. My Lords, I am in full agreement with the reasoning of my noble and learned friends, Lord Wilberforce and Lord Brandon of Oakbrook. I wish only to add a comment on the subject of where a contract is made, when it is made by an offer accepted by telex between parties in different countries. The question is whether acceptance by telex falls within the general rule that it requires to be notified to the offeror in order to be binding, or within the exception of the postal rule whereby it becomes binding when (and where) it is handed

over to the post office. The posting rule is based on considerations of practical convenience, arising from the delay that is inevitable in delivering a letter. But it has been extended to apply to telegrams sent through the post office, and in strict logic there is much to be said for applying it also to telex messages sent by one business firm directly to another. There is very little, if any, difference in the mechanics of transmission between a private telex from one business office to another, and a telegram sent through the post office especially one sent from one large city to another. Even the element of delay will not be greatly different in the typical case where the operator of the recipient's telex is a clerk with no authority to conclude contracts, who has to hand it to his principal. In such a case a telex message is not in fact received instantaneously by the responsible principal. I assume that the present case is a case of that sort. Nevertheless I have reached the opinion that, on balance, an acceptance sent by telex directly from the acceptor's office to the offeror's office should be treated as if it were an instantaneous communication between principals, like a telephone conversation. One reason is that the decision to that effect in Entores v. Miles Far East Corporation [1955] 2 Q.B. 327 seems to have worked without leading to serious difficulty or complaint from the business community. Secondly, once the message has been received on the offeror's telex machine, it is not unreasonable to treat it as delivered to the principal offeror, because it is his responsibility to arrange for prompt handling of messages within his own office. Thirdly, a party (the acceptor) who tries to send a message by telex can generally tell if his message has not been received on the other party's (the offeror's) machine, whereas the offeror, of course, will not know if an unsuccessful attempt has been made to send an acceptance to him. It is therefore convenient that the acceptor, being in the better position, should have the responsibility of ensuring that his message is received. For these reasons I think it is right that in the ordinary simple case, such as I take this to be, the general rule and not the postal rule should

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[1983] 2 A.C. 34 Page 9 [1983] 2 A.C. 34 [1982] 2 W.L.R. 264 [1982] 1 All E.R. 293 [1982] 1 Lloyd's Rep. 217 [1982] Com. L.R. 72 [1982] E.C.C. 322 (1982) 126 S.J. 116 [1983] 2 A.C. 34 [1982] 2 W.L.R. 264 [1982] 1 All E.R. 293 [1982] 1 Lloyd's Rep. 217 [1982] Com. L.R. 72 [1982] E.C.C. 322 (1982) 126 S.J. 116 (Cite as: [1983] 2 A.C. 34)

apply. But I agree with both my*44 noble and learned friends that the general rule will not cover all the many variations that may occur with telex messages.LORD RUSSELL OF KILLOWEN. My Lords, I have had the advantage of reading in draft the speeches prepared by my noble and learned friends, Lord Wilberforce and Lord Brandon of Oakbrook. I agree with them and accordingly I too would dismiss this appeal.LORD BRIDGE OF HARWICH. My Lords, I have had the advantage of reading in draft the speeches of my noble and learned friends, Lord Wilberforce and Lord Brandon of Oakbrook. I agree with them that, for the reasons they give, this appeal should be dismissed.LORD BRANDON OF OAKBROOK. My Lords, both the appellants (whom I shall call "the buyers") and the respondents (whom I shall call "the sellers") are traders in steel. The buyers are an English company. The sellers are an Austrian company, having no place of business in England or Wales. It is common ground between the buyers and the sellers that early in May 1979, following negotiations which began in April 1979, an executory contract was made between them for the sale by the sellers to the buyers of a quantity of mild steel bars. It is further common ground that, in circumstances which I shall explain later, that executory contract (which I shall call "the contract") was never performed. On November 30, 1979, a considerable time after performance of the contract should, according to its terms, have been completed, the buyers applied ex parte to Robert Goff J. in the Commercial Court for leave to issue a writ against the sellers claiming damages for breach of the contract, and to serve notice of such writ on the sellers out of the jurisdiction in Austria. The application was supported by an affidavit of Mr. Jackson, a partner in the firm of solicitors acting for the buyers, and the learned judge made the order which he was asked to make. Pursuant to that

order, the buyers issued a writ against the sellers indorsed on the back with points of claim, and served notice of such writ on the sellers in Austria. On March 11, 1980, Mocatta J. in the Commercial Court dismissed an application by the sellers, who had meanwhile entered a conditional appearance in the action, to set aside the service on them of notice of the writ in Austria. The sellers appealed against the decision of Mocatta J. and by order of June 12, 1980, the Court of Appeal (Stephenson and Templeman L.JJ.) allowed the appeal and set aside both the order of Robert Goff J. of November 30, 1979, and that of Mocatta J. of March 11, 1980. The Court of Appeal refused an application by the buyers to present a petition of appeal to your Lordships' House, but leave for them to do so was later given by the Appeal Committee. There are two grounds on which the buyers relied in the courts below, and continued to rely in your Lordships' House, for their contention that this was a proper case for service out of the jurisdiction in Austria under R.S.C., Ord. 11, r. 1 (1) . The first ground was that the case came within*45 paragraph (f) of rule 1 (1) because the action begun by the writ was brought against the sellers to recover damages in respect of a contract which was made in England. The second ground was that the case came within paragraph (g) of rule 1 (1) because the action begun by the writ was brought against the sellers in respect of a breach of contract committed in England. Robert Goff J. appears to have accepted both grounds. Mocatta J. accepted the first ground but rejected the second. The Court of Appeal rejected both grounds. My Lords, the negotiations between the parties which led up to the making of the contract were conducted, in the main at any rate, by telex. I say "in the main" because there is some evidence, contained in the affidavit of Mr. Jackson, to which I referred earlier, that there were also some telephone conversations between representatives

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[1983] 2 A.C. 34 Page 10 [1983] 2 A.C. 34 [1982] 2 W.L.R. 264 [1982] 1 All E.R. 293 [1982] 1 Lloyd's Rep. 217 [1982] Com. L.R. 72 [1982] E.C.C. 322 (1982) 126 S.J. 116 [1983] 2 A.C. 34 [1982] 2 W.L.R. 264 [1982] 1 All E.R. 293 [1982] 1 Lloyd's Rep. 217 [1982] Com. L.R. 72 [1982] E.C.C. 322 (1982) 126 S.J. 116 (Cite as: [1983] 2 A.C. 34)

of the parties relating to the matter. There was, however, no evidence to show what was said in the course of any such telephone conversations and no significance can therefore be attached to them. There were six telexes leading up to making of the contract: four from the buyers to the sellers, sent on April 20, April 23, April 26 and May 4, 1979; and two from the sellers to the buyers sent on April 25, and May 3, 1979. In the course of these telexes the principal terms of the contract were agreed as follows. First, the goods to be sold were to be 20,000 metric tons of mild steel bars of four different sizes. Secondly, the goods were to be delivered c. & f. Alexandria on liner terms. Thirdly, the price was to be U.S.$353 per metric ton. Fourthly, the goods were to be shipped in five separate instalments, each of 4,000 metric tons, in June, July, August, September and October 1979. Fifthly, payment of the price of each of the five instalments, namely, U.S.$1,412,000, was to be made by means of a letter of credit, revolving four times, which was to be operative at a named bank in Vienna. Sixthly, the following documents were to be presented against the letter of credit: a commercial invoice; a full set of clean bills of lading; a certificate of origin legalised by the Egyptian embassy or consulate; a blacklist certificate of the shipping company; a works certificate indicating the mechanical properties of the steel and that the bars were manufactured according ta British Standard Specification 4449/1969. Seventhly, the sellers were to provide a performance bond based on a percentage of the total price of U.S.$7,060,000. With regard to this the buyers first proposed that the percentage should be 5 per cent., but the sellers made a counterproposal of 3 per cent. which, since the buyers made no objection to it, appears to have been impliedly accepted by them. Eighthly, if the freight rates were to increase for the shipments in September and October, the buyers would repay such increase to the sellers. With regard to this too, the proposal came first from the sellers and, since the buyers made no objection ta it, appears again to have been impliedly accepted by them.

In their telex of May 3, 1979, the sellers named the Zentralsparkasse der Gemeinde bank in Vienna as the bank at which the buyers' letter of credit was to be operative. Following receipt of that telex the buyers, on May 4, 1979, gave instructions to their London bank, as a result of which the latter sent to Osterreichische Landerbank, their correspondent bank in Vienna, a long telex which amounted either to a letter of credit, or at any rate to notice of a letter of credit, opened by a Swiss firm, Mide-strade Est.,*46 of Chiasso, in favour of the sellers in respect of the prices payable for the five instalments of steel bars the subject matter of the contract. In the last paragraph but one of that telex the buyers' London bank said: "This telex advice should be considered as a negotiable instrument. Please advise the above credit through Zentralsparkasse der Gemeinde, Wien, Vienna. Please also advise the beneficiaries about the arrival of credit on telephone." After giving those instructions to their London bank, the buyers on the same day, May 4, 1979, sent to the sellers a telex in these terms: "Confirm having opened our irrevocable letter of credit No. 0761/79 on account of Mide-strade Est., Chiasso, Switzerland, favouring yourselves for U.S. dlrs. 1,142,000 covering shipment of 4,000 m. tons rebars stop the credit is to revolve four times covering total shipment of 20,000 m. tons stop this credit has been advised through Osterreichische Landerbank (Wien)." Mide-strade Est. of Chiasso in Switzerland were in fact principals on whose behalf the buyers, throughout their negotiations with the sellers, were acting as agents. The mention, however, of that Swiss firm's name in the telexed letter of credit sent by the buyers' London bank to their correspondent bank in Vienna, and in the telex from the buyers to the sellers set out above, constituted the first intimation to the sellers that a third party was involved in the contract on the buyers' side.

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[1983] 2 A.C. 34 Page 11 [1983] 2 A.C. 34 [1982] 2 W.L.R. 264 [1982] 1 All E.R. 293 [1982] 1 Lloyd's Rep. 217 [1982] Com. L.R. 72 [1982] E.C.C. 322 (1982) 126 S.J. 116 [1983] 2 A.C. 34 [1982] 2 W.L.R. 264 [1982] 1 All E.R. 293 [1982] 1 Lloyd's Rep. 217 [1982] Com. L.R. 72 [1982] E.C.C. 322 (1982) 126 S.J. 116 (Cite as: [1983] 2 A.C. 34)

On May 9, 1979, the sellers sent a telex to the buyers complaining that the letter of credit was unworkable and that it had been opened in the name not of the buyers but of a Swiss firm of whom the sellers knew nothing. On May 21, 1979, the sellers sent a further telex to the buyers in which they said, in effect, that they were withdrawing from the contract on the ground that they had not had opened in their favour a proper letter of credit under it. Further telexes were exchanged in which the buyers sought to persuade the sellers to change their minds and go on with the contract, but these efforts all failed. The result accordingly was that the contract was never performed. My Lords, I shall consider first the buyers' contention that the case comes within paragraph (f) of R.S.C., Ord. 11, r. 1 (1) , because the action begun by the writ was brought against the sellers to recover damages in respect of a contract which was made in England. In order to examine that contention it is necessary to consider the question when and where the negotiations between the buyer and the seller resulted in what both parties agree they did result in, namely, a concluded contract of sale. In Mr. Jackson's affidavit of November 21, 1979, in support of the buyers' ex parte application to Robert Goff J. he stated in paragraph 4 that the contract came into being as the result of an offer by the buyers, contained in a telex sent by them to the sellers on April 26, 1979, being accepted by a telex sent by the sellers to the buyers on May 3, 1979. The manner in which the contract was made was pleaded in the same way in paragraph 4 of the buyers' points of claim indorsed on the back of the writ. Examination of the two telexes concerned does not support the buyers'*47 original case on how the contract was concluded. The buyers' telex of April 26, 1979, is capable of being interpreted as an offer, but the sellers' telex of May 3, 1979, cannot be interpreted as an acceptance of such offer, because it introduced terms which differed materially from those contained in the latter. In particular, the buyers in their telex of April 26,

1979, proposed a performance bond of 5 per cent. on the total purchase price, whereas the sellers in their telex of May 3, 1979, specified a performance bond of 3 per cent. The sellers further introduced an entirely new term, under which the buyers were to pay to the sellers any increase in freight charges in respect of the September and October shipments. In these circumstances the sellers' telex of May 3 must, in accordance with well-established principles of the law of contract, be interpreted not as an acceptance of the buyers' offer but as a counter-offer. In your Lordships' House, Mr. Thompson Q.C. for the buyers accepted, as I understood him, that the way in which the contract was said to have been made, first, in paragraph 4 of Mr. Jackson's affidavit and, secondly, in paragraph 4 of the buyers' points of claim, could not be supported. He recognised that the sellers' telex of May 3 had to be interpreted as a counter-offer, and he put forward two alternative cases as to the manner in which that counter-offer was accepted by the buyers, either of which would, he said, produce the same result, namely, that acceptance took place, and the contract was therefore made, in England. Mr. Thompson's first contention was that the sellers' counter-offer contained in their telex of May 3, 1979, was accepted by the buyers by their conduct on May 4, 1979, in instructing their London bank to open the required letter of credit operative in Vienna. His second and alternative contention was that the counter-offer was accepted by the buyers sending to the sellers their telex of May 4, 1979, which I quoted in full above. In support of the first contention Mr. Thompson argued that the conduct of the buyers in giving the instructions concerned to their London bank took place in England, and that, since that conduct had the effect of concluding the contract, the contract was one made in England for the purposes of paragraph (f) of R.S.C., Ord. 11, r. 1 (1) . In support of his second and alternative contention, Mr. Thompson argued that, since the buyers'

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[1983] 2 A.C. 34 Page 12 [1983] 2 A.C. 34 [1982] 2 W.L.R. 264 [1982] 1 All E.R. 293 [1982] 1 Lloyd's Rep. 217 [1982] Com. L.R. 72 [1982] E.C.C. 322 (1982) 126 S.J. 116 [1983] 2 A.C. 34 [1982] 2 W.L.R. 264 [1982] 1 All E.R. 293 [1982] 1 Lloyd's Rep. 217 [1982] Com. L.R. 72 [1982] E.C.C. 322 (1982) 126 S.J. 116 (Cite as: [1983] 2 A.C. 34)

telex of May 4, which resulted in the concluding of the contract, was sent by a representative of the buyers in London, once again the contract was one made in England for the purposes of paragraph (f) above. My Lords, I do not consider that Mr. Thompson's first contention, that the contract was concluded by the conduct of the buyers on May 4, 1979, in giving instructions to their London bank can possibly be right. It may be that when, as a result of those instructions, a letter of credit was opened operative at a bank in Vienna, and the sellers were then notified of that fact by that bank, such notification had the effect of bringing into being a concluded contract on the terms of the sellers' telex of May 3, 1979. But the proposition that the mere giving by the buyers to their London bank of the instructions concerned, without any notification to the sellers of the fact that such instructions had been given, or of their nature and effect, could result in bringing into being a concluded contract appears to me to*48 be quite untenable. On the other hand, if the contract was concluded as a result of a letter of credit operative at a bank in Vienna being opened, and the bank concerned then notifying the sellers of such opening, the contract so concluded would be one made in Austria and not in England. Mr. Thompson's second and alternative case, that the contract was concluded by the buyers transmitting to the sellers their telex of May 4, 1979, seems to me to be the correct analysis of the transaction. On this analysis, however, the buyers are up against the difficulty that it was decided by the Court of Appeal in Entores Ltd. v. Miles Far East Corporation [1955] 2 Q.B. 327 that, when an offer is accepted by telex, the contract thereby made is to be regarded as having been so made at the place where such telex was received (in this case Vienna) and not in the place from which such telex was sent (in this case London). Mr. Thompson invited your Lordships to hold that the Entores case was wrongly decided and should therefore be overruled. In this connection he said that it was well-established law that, when

acceptance of an offer was notified to an offeror by post or telegram, the concluding of the contract took place when and where the letter of acceptance was posted or the telegram of acceptance was despatched. He then argued that the same rule should apply to cases where the acceptance of an offer was communicated by telex, with the consequence that the contract so made should be regarded as having been made at the place from which the telex was sent and not the place where it was received. My Lords, I am not persuaded that the Entores case [1955] 2 Q.B. 327 , was wrongly decided and should therefore be overruled. On the contrary, I think that it was rightly decided and should be approved. The general principle of law applicable to the formation of a contract by offer and acceptance is that the acceptance of the offer by the offeree must be notified to the offeror before a contract can be regarded as concluded, Carlill v. Carbolic Smoke Ball Co. [1893] 1 Q.B. 256 , 262, per Lindley L.J. The cases on acceptance by letter and telegram constitute an exception to the general principle of the law of contract stated above. The reason for the exception is commercial expediency: see, for example, Imperial Land Co. of Marseilles, In re (Harris' Case) (1872) L.R. 7 Ch.App. 587 , 692 per Mellish L.J. That reason of commercial expediency applies to cases where there is bound to be a substantial interval between the time when the acceptance is sent and the time when it is received. In such cases the exception to the general rule is more convenient, and makes on the whole for greater fairness, than the general rule itself would do. In my opinion, however, that reason of commercial expediency does not have any application when the means of communication employed between the offeror and the offeree is instantaneous in nature, as is the case when either the telephone or telex is used. In such cases the general principle relating to the formation of contracts remains applicable, with the result that the contract is made where and when the telex of acceptance is received by the offeror.

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[1983] 2 A.C. 34 Page 13 [1983] 2 A.C. 34 [1982] 2 W.L.R. 264 [1982] 1 All E.R. 293 [1982] 1 Lloyd's Rep. 217 [1982] Com. L.R. 72 [1982] E.C.C. 322 (1982) 126 S.J. 116 [1983] 2 A.C. 34 [1982] 2 W.L.R. 264 [1982] 1 All E.R. 293 [1982] 1 Lloyd's Rep. 217 [1982] Com. L.R. 72 [1982] E.C.C. 322 (1982) 126 S.J. 116 (Cite as: [1983] 2 A.C. 34)

It follows from what I have said that, in my opinion, Mr. Thompson's contention that the present case falls within paragraph (f) of R.S.C., Ord. 11, r. 1 (1) , fails and must be rejected.*49 I turn to examine Mr. Thompson's other contention that the present case falls within paragraph (g) of R.S.C., Ord. 11, r. 1 (1) . In order to do this it is necessary to consider first what is the breach of the contract in respect of which the buyers' action against the sellers was brought, and then to see whether such breach, assuming that it was committed, took place within or outside the jurisdiction. This part of the case appears to have been conducted by both sides at every stage in the courts below as if the breach of the contract in respect of which the buyers' action was brought consisted of an anticipatory breach in the form of a repudiation of the contract contained in the sellers' telexes of May 9 and 21, 1979. As a result the question considered in the courts below was whether such repudiation took place in the country from which the telexes concerned were sent, namely, Austria, or in the country in which they were received, namely, England. Both Mocatta J. and the Court of Appeal took the view that the repudiation, and therefore the relevant breach of the contract, took place in Austria, the country from which the telexes concerned were sent. In my view both sides, in conducting this part of the case on the basis described above, were acting under a complete misapprehension as to what was the breach of the contract in respect of which the buyers' action was brought. That this is so becomes immediately apparent from the terms of paragraphs 6, 7 and 8 of the points of claim indorsed on the back of the writ. Assuming, in favour of the buyers, that the sellers, by sending their telexes of May 9 and 21, repudiated the contract, a situation then arose in which the buyers were entitled to elect between two courses. They could either accept the repudiation and treat the contract as at an end; or they could decline to accept the repudiation and treat

the contract as still subsisting. It is clear that, in that situation, the buyers elected to follow the second course and not the first. I say that that is clear for four reasons. First, there is nowhere to be found in the documents put in evidence any telex or letter from the buyers to the sellers indicating that the former accepted the repudiation of the contract by the latter. Secondly, though reference is made in paragraph 6 of the buyers' points of claim to the sellers' two telexes of May 9 and 21, 1979, it is nowhere pleaded either that the sending of those telexes constituted a repudiation of the contract by the sellers, or that the buyers elected to accept such repudiation and treat the contract as at an end. Thirdly, the breach of the contract in fact pleaded in paragraph 7 of the points of claim is simply a failure by the sellers to perform the contract by opening a performance bond and delivering the steel. Fourthly, the damage alleged to have been suffered by the buyers in paragraph 8 of the points of claim is damage calculated by reference to the difference between the market and the contract prices of the steel at the time when the five instalments should, on the footing that the contract remained in force, have been delivered to the buyers. Having regard to these matters the question to be considered in relation to paragraph (g) of R.S.C., Ord. 11, r. 1 (1) is not in what country did any alleged anticipatory repudiation of the contract by the sellers take*50 place. The question is rather whether the sellers, on the assumption that they failed to perform any part of their obligations under the contract, thereby committed any breach of the contract in England. There is no difficulty in giving a negative answer to that question, for it has never been suggested that any part of the contract to be performed by the sellers was to be performed anywhere except outside the jurisdiction. It follows from what I have said that, in my opinion, Mr. Thompson's contention that the present case falls within paragraph (g) of R.S.C., Ord. 11, r. 1 (1) also fails and must be rejected. My Lords, for the reasons which I have given, I

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[1983] 2 A.C. 34 Page 14 [1983] 2 A.C. 34 [1982] 2 W.L.R. 264 [1982] 1 All E.R. 293 [1982] 1 Lloyd's Rep. 217 [1982] Com. L.R. 72 [1982] E.C.C. 322 (1982) 126 S.J. 116 [1983] 2 A.C. 34 [1982] 2 W.L.R. 264 [1982] 1 All E.R. 293 [1982] 1 Lloyd's Rep. 217 [1982] Com. L.R. 72 [1982] E.C.C. 322 (1982) 126 S.J. 116 (Cite as: [1983] 2 A.C. 34)

would affirm the decision of the Court of Appeal, though on different grounds in relation to paragraph (g), and dismiss the appeal. Since preparing this speech I have had the advantage of reading in draft that of my noble and learned friend, Lord Wilberforce. In it he points out that, while the present case, like the Entores case [1955] 2 Q.B. 327 , is concerned only with instantaneous communication by telex between the principals on either side, there may in other cases be a number of variations on that simple theme. He further expresses the view that there can be no general rule capable of covering all such variations, and that, when they occur, the problems posed by them must be resolved by reference to the intention of the parties, sound business practice and in some cases a judgment where the risk shall lie. I agree entirely with these observations.Appeal dismissed. (F. C. ) END OF DOCUMENT

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