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There is a general common law presumption that a legislature is only concerned with all conduct taking place within the territory and with no other conduct. There is also a related presumption that words in a statute are limited so as to have effect only within the jurisdiction of the legislature, and do not reduce the right of foreigners.
If a contract is created in Hong Kong, the Hong Kong courts can exercise jurisdiction in cases where the breach of contract occurred in Hong Kong, regardless of whether or not the contract was originally formed in Hong Kong. Thus the moment of contract creation, whether the court use the postal rule, the receipt rule or any other rule, becomes extremely important for jurisdiction purposes

Where the Contract Is Made?
Where the Contract Is Breached?
Contract Governed by Hong Kong Law




The display of goods in the website is similar to a display of goods in the physical shop window. Those are not offers but mere invitation to treat. The web company should be regarded as the party to accept the offer from the net customers and not the offeror.

If the act of sending electronic message is to be regarded as similar to sending a mail by post, then the contract is effected when the acceptance is sent. Thus the place of contract formation will be at the place of business of the web company. Nevertheless, the argument in favour of postal rule is not persuasive at all. First, unlike postal mail, instead of taking days, it takes a few minutes to send an e-message. The statement of acceptance is communicated back to the customer as soon as the offer is sent and processed. Second, like a telephone acceptance, a server will always know whether a message has been received by its intended recipient. If there is any problem in transmission or either side goes offline very often a message of 'server not responding' will appear to notify the other side. These factors are in fact pointing to the instantaneous nature of sending e-messages. Following this, the contract should be regarded as formed in the customer's locality where the customer received the statement of acceptance.




Hong Kong courts can exercise jurisdiction in cases where the breach of contract occurred in Hong Kong, regardless whether or not the contract was originally formed in Hong Kong. The rule is that there can only be breach of contract within jurisdiction if the contract requires acts to be done in that specific jurisdiction. Foreign customers who fail to pay Hong Kong merchants can face litigation in Hong Kong because payment is to be performed at the merchant's location. On the other hand, the foreign customers can sue the Hong Kong merchants in their own localities if the Hong Kong merchants fail to deliver the goods to them.




If the applicable law of a contract is Hong Kong then the Hong Kong courts can exercise jurisdiction.





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