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Tenax Steamship Co v Owners of the Motor Vessel Brimnes [1974]

Contract Law – Offer and Acceptance

Tenax Steamship Co v Owners of the Motor Vessel Brimnes [1974] EWCA Civ 15 is a key case within the contract law degree module for the Bachelor of Laws LLB programme at university. The case concerns offer and acceptance for the formation of a contract. This case elaborates on the postal rule, which was established in Adams v Lindsell (1818) 106 ER 250.

Facts:

In this case the defendants agreed to sell their ship, the Brimnes, to the claimant Tenax Steamship Company. This sale was under the condition the ship would be leased back to the defendants under a time charter. A time charter means they would have it for a set amount of time. The payment for renting the ship under the time charter was often late. Due to late payment a notice to withdraw the ship from service was sent by Telex. This message was sent during normal office hours but was not read until the day after the defendant had already paid.

Issue:

Was the notice of withdrawal effective prior to the defendant’s payment?

Held:

Upon appeal it was decided the withdrawal was effective as soon as the message was sent, not when it was read, because the message was sent during normal office hours, and it was expected it would be noticed. This case developed the postal rule further for instantaneous communication. All instant communication would be treated as noticed if it could have been read at the time of receipt.

Further reading: The case of Brinkibon Ltd v Stahag Stahl [1983] 2 AC 34 also concerns the postal rule and instantaneous communication so should be read for further understanding of this topic.

OSCOLA reference this article/case: LawLessons, ‘Tenax Steamship Co v Owners of the Motor Vessel Brimnes [1974] EWCA Civ 15’ (LawLessons, 6th January 2021) <https://lawlessons.co.uk/tenax-steamship-co-v-owners-of-the-motor-vessel-brimnes-1974-ewca-civ-15> accessed 7th July 2022

Published inContract LawOffer and Acceptance
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