Tenax Steamship Co v Owners of the Motor Vessel Brimnes

Tenax Steamship Co v Owners of the Motor Vessel Brimnes [1974] EWCA Civ 15

Contract – Acceptance – Formation – Instantaneous Communication – Agreement

Facts

The ship called Brimnes belonged to the defendants, Owners of the Motor Vessel Brimnes. They agreed to sell her to the complainant, which was on the condition that the ship would be time-chartered back to them. On several occasions, the hire payment was made later than agreed. In response, the complainant sent a message by Telex, which gave notice of withdrawal of the ship from service. This Telex message was sent during normal office hours. However, the defendant did not read it until the next day and had already made payment.

Issues

The claim was dismissed by the court, but this decision was appealed. The issue in the appeal concerned whether the notice of withdrawal of service was effective before the defendant’s payment of hire.

Decision/Outcome

It was held that the withdrawal was effective when it Telex message was received, not when the message was read. As it was sent during normal office hours, the staff neglected to pay attention to the Telex machine, as the staff member in charge of Telex did not leave the office until later on. Thus, this case became authority for the reasoning that any withdrawal of an offer sent through a form of instantaneous communication, such as Telex, would be effective when it could have been read by the other party; not when it was actually read. In this case, the defendant should have read this Telex message, but through their own actions, this did not happen.