Acceptance by email
Logan J expresses the view, which in the end wasn’t necessary for his decision, that the instantaneous communication rule applies when considering when and where the acceptance of an offer by email occurs. That is, his Honour would employ an analogy to telexes – the place where the message is received; not the postal rule the time and place where the letter was posted.
25. Flottweg’s acceptance was communicated by email to Olivaylle at its olive grove in Victoria. Experience suggests that email is often, but not invariably, a form of near instantaneous communication. The parties seemed content to assume that the place of contract was either Victoria or New South Wales, content because the common law of Australia was the same in either place and so, too, was the only statute law considered material. There was no suggestion in submissions that the place of contract was, for example, Germany. As a result, the ramifications of the adoption by the parties of email for their written pre-contractual communications, particularly the acceptance, were not explored. As it happens, the subject of formation of contracts by email has been explored in depth in an article by a local academic, Christensen S, “Formation of Contracts by Email Is it Just the Same as the Post?” (2001) 1(1) Queensland University of Technology Law and Justice Journal 22. Ms Christensen details there arguments for and against the assimilation of email communications with “the postal rule” or with what one might term “the instantaneous communication rule” and also the local adoption of international convention which touches on the subject. Having regard to the position taken by the parties in this case, it is not necessary to give detailed consideration to the point. It is enough to observe that I consider that there are analogies to be drawn with the way the law developed in relation to telex communications in an earlier era where what I have termed “the instantaneous communication rule” came to be adopted, perhaps at the expense of scientific precision but not so in relation to common commercial understanding. Thus, by analogy with cases concerning the position with what were, or were treated as, other forms of instantaneous communication, I consider that the contract was made where the acceptance was received, ie in Victoria: Entores Ltd v Miles Far East Corporation [1955] 2 QB 327; W A Dewhurst & Co Pty Ltd v Cawrse [1960] VR 278; Express Airways v Port Augusta Air Services [1980] Qd R 543; Reese Bros Plastics Ltd v Hamon-Sobelco Australia Pty Ltd (1988) 5 BPR 11,106.
Olivaylle Pty Ltd v Flottweg GMBH & Co KGAA (No 4) [2009] FCA 522
Lid dip Inchoate.
This seems eminently sensible in many situations, but could well prove rather random. Suppose you’re travelling from INTA and you get the email on your Blackberry (or that other phone) at LAX. Contract governed by the laws of California?
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