The recipient rule appears to be the logical default rule. Samuel Teo had used all these notional numerals on the training template. 70 The third plaintiff proceeded to place orders on behalf of the sixth plaintiff on the HP website. In accordance with s15(1) of the ETA, acceptance would be effective the moment the offer enters that node of the network outside the control of the originator. 125 The principal source of this view has been Lord DenningMR. There are, however, other sound reasons to argue against such a rule in favour of the recipient rule. The fifth plaintiff, even if he had not been alerted by the second plaintiff, would have instinctively appreciated the existence of a manifest error without any prompting whatsoever. Rules and case law pertaining to amendments are premised upon achieving even-handedness in the context of an adversarial system by: (a) ensuring that the parties apprise each other and the court of the essential facts that they intend to rely on in addressing the issues in controversy or dispute; (b) requiring that an amendment should be attended to in the usual course of events, at an early stage of the proceedings, to ensure that no surprise or prejudice is inflicted on or caused to opposing parties; (c) requiring careful consideration whether any amendments sought at a late stage of the proceedings will cause any prejudice to the opposing party. The most that the court can do in these circumstances is to refuse E [the other party, who wants the contract held void] specific performance, which lies in the discretion of the court and will probably be refused where E has been guilty of some degree of sharp practice. 96 In an Internet sale, a prospective purchaser is not able to view the physical stock available. It takes the view that there is no jurisdiction in equity to rescind a contract that is valid at common law, on the basis of mistake. Desmond further informed the first plaintiff that the sale price of each laser printer was in the region of $3,000 to $4,000. If he was prepared to commit this view in writing to a larger circle of 54 friends and business associates after his communication with the second and third plaintiffs, he would certainly have shared this view with his close friends with even greater candour and detail. 121 While my views here are not central to my decision, the plaintiffs have adverted to this relationship in a misguided attempt to derail the defence on an arid pleading technicality. The Canadian and Australian cases have moved along with the eddies of unconscionability. The e-mail was given a high importance priority and captioned go load it now!!. 44 He made his first purchase of ten laser printers at about 2.42am. While this is the general principle for shop displays, it is open to a merchant to offer by way of an advertisement the mechanics of a unilateral or bilateral contract. A particular class of case which illustrates unilateral mistake as to the terms intended, known to the other party, is that in which an offer which would be very advantageous to the offeree is snapped up by the offeree. 113 The English Court of Appeal in Commission for the New Towns v Cooper (Great Britain) Ltd [1995] Ch 259, a case of common mistake, imported the concept of Nelsonian knowledge and applied the framework of various categories of knowledge outlined by Peter GibsonJ in Baden v Societe Generale pour Favoriser le Developpement du Commerce et de lIndustrie en FranceSA [1993] 1 WLR 509. SingletonJ held at 568: The offer was wrongly expressed, and the defendants by their evidence, and by the correspondence, have satisfied me that the plaintiff could not reasonably have supposed that that offer contained the offerers real intention. Given his professional and business background, he must have realised that the $66 price posting on the HP website was an error. In the Singapore context a similar approach has been adopted by the Court of Appeal in Aircharter World Pte Ltd v Kontena Nasional Bhd [1999] 3 SLR 1 at [30] and [31], and Projection Pte Ltd v The Tai Ping Insurance Co Ltd [2001] 2 SLR 399 at [15]. 91 There is no real conundrum as to whether contractual principles apply to Internet contracts. He had left everything to his brother. 61 The fifth plaintiff placed an order for 100 laser printers at about 3.51am. There cannot be any legitimate expectation of enforcement on the part of the non-mistaken party seeking to take advantage of appearances. If stock of a product has been exhausted, a prospective purchaser cannot sue for specific performance or damages as he has merely made an offer that has not been accepted by the merchant. The first plaintiffs purchase took place soon after the ICQ conversation with Desmond where Desmond had in no uncertain terms pitched the price of the laser printer between $3,000 to $4,000. It presents a textbook example of offer and acceptance. At 4.15am, he sent an email to the first plaintiff, copied to the second plaintiff, with a happy emoticon following check out the prices here (see [19] supra). Suggested Citation: Seng, Daniel Kiat Boon, Quoine Pte Ltd v B2C2 Ltd: A Commentary (June 2020). Altogether he sought to purchase 760 units, the largest number of orders placed by anyone between 8 and 13January 2003. He claims he then accessed the US HP website either through a Google web search engine or by abbreviating the url of the HP website. 40 When the fourth plaintiff responded to the first plaintiffs mass e-mail, he copied his response to the second plaintiff. This is an inane argument. He is 32 years old and conducts his own network marketing business. The case went before both the High Court and the Court of Appeal. 104 The creases over the theoretical approach to adopt in determining the existence of contracts have for some time now been decisively ironed out in favour of the objective theory. It was listed at the price of $66, when it was advertised on the official HP website for $3,854. The knowledge that the offer is not meant according to its literal terms simply displaces the objective theory of contract. Date of Verdicts: 12 April 2004, 13 January 2005. He made Internet search enquiries as to whether the printer model existed and at what price it could be resold. Phang, Controversy in Common Mistake [2003] Conv 247; Reynolds, Reconsider the Contract Textbooks (2003) 119LQR 177. To export a reference to this article please select a referencing stye below: This selection of essays, case summaries and dissertations is of relevance to law students within the Commonwealth and for those students who are studying the Rule of Law from outside the Commonwealth . He appeared to be consummately familiar with Internet practices and was forced to concede that he thought it was weird and unusual when he saw the number 55 on the relevant webpages in place of the actual product description. The affidavits did not add anything new. [emphasis added]. The quintessential approach of the law is to preserve rather than to undermine contracts. The issue could be critical where third party rights are in issue as in. I do not accept that there were no discussions between them on the price posting being an error. These considerations take precedence over the culpability associated with causing the mistake. 69 The sixth plaintiff was awakened by his brother, the third plaintiff, at about 3.00am. We can understand why the decision in Bell v Lever Bros Ltd did not find favour with Lord DenningMR. An equitable jurisdiction to grant rescission on terms where a common fundamental mistake has induced a contract gives greater flexibility than a doctrine of common law which holds the contract void in such circumstances. 142 The plaintiffs were bound by personal relationships as well as past and present common commercial interests. The defendant even had its terms and conditions posted on its website. Further, the character of the mistake was such that any reasonable person similarly circumstanced as each of the plaintiffs would have had every reason to believe that a manifest error had occurred. 15 Early on the morning of 13January 2003 at about 1.17am, the first plaintiff received a message from a friend, Desmond Tan (Desmond), through an Internet chatlink. 65 He was particularly circumspect in recounting his communications with the second plaintiff. In the Singapore context a similar approach has been adopted by the Court of Appeal in, 105 It is not only reasonable but right that the objective appearance of a contract should not operate in favour of a party who is aware, in the eyes of the law, of the true state of affairs when, for instance, there is real misapprehension on the part of the mistaken party and when the actual reality of the situation is starkly obvious. They deny having had any communications amongst themselves about the possibility, let alone probability, that the price posting on the website could have been a mistake. They are all well-educated professionals articulate, entrepreneurial and, quite bluntly, streetwise and savvy individuals. Loose language may result in inadvertently establishing contractual liability to a much wider range of purchasers than resources permit. While they did not invariably admit that their searches were made prior to each of the respective transactions, it was plain that they did not tell the whole truth about what they knew, how they knew it and when they knew it. 21 The first plaintiff must have realised at the outset that he would have to explain with a certain measure of credibility the purport and significance of all his Internet communications between 1.00am and 3.00am on 13January 2003. Keywords Contract Online Store Mistake Pricing Mistake Citation hahaha means S$132, Desmond 13/01/20 01:43 even $500 is a steal. 66 The fifth plaintiff also gave evidence that the next morning, when he logged on his computer, he noted that a Hong Kong lawyer friend, Coral Toh, was also logged onto her computer. The fifth plaintiff was also a member of this bridge group. They want Digiland to honour the deal or at least to compensate them. Once again, however, this does not deprive E of his legal remedies; nor does it avail V if he wishes to recover property which he may have transferred under the contract. Homestead Assets Sdn Bhd v. Contramec . 134 It is not really in issue that contracts can be effectively concluded over the Internet and that programmed computers sending out automated responses can bind the sender. 90 After leave was granted to amend the defence, each of the plaintiffs filed a further short affidavit refuting knowledge of the mistake relating to pricing. They even discussed the possible scenario of the defendant not honouring the transactions. The plaintiffs orders were processed by the defendants automated system and confirmation notes were automatically despatched to the plaintiffs within a few minutes. There was no satisfactory reason for the genesis of this e-mail (see [67] infra). 42 Mark Yeow Kinn Keong has a Bachelor of Science (Economics) degree from the University of London. In addition, he despatched e-mails to the fourth and fifth plaintiffs attaching a hyperlink to the HP website. He seemed to suggest that in a number of cases going as far back as Cundy v Lindsay (1878) 3App Cas 459, the contracts in issue therein should be treated as only being voidable in equity: see Solle v Butcher at 692, Lewis v Averay [1972] 1 QB 198 at 207 and dicta in Magee v Pennine Insurance Co Ltd [1969] 2 QB 507 at 514 where he opined that: A common mistake, even on a most fundamental matter, does not make a contract void at law: but it makes it voidable in equity. Section13 of the ETA deems that a message by a partys automated computer system originates from the party itself. Desmond: 13/01/20 01:40 if any friend got extra printer u want? Thus, 119 It is apparent from this overview that the Canadian courts have integrated through their equitable jurisdiction the concept of common law mistake within the rubric of unconscionability. When pressed as to whether he visited other websites, he said he could not confirm that one way or the other. Upon accessing the Digilandmall website and confirming that the printer was offered there at $66 as well, he placed a further order for 25 laser printers through that website at about 3.29am. The leading Canadian decision in this area is the case of McMaster University v Wilchar Construction Ltd (1971) 22DLR(3d) 9 which, incidentally, was cited with approval by the Australian High Court in Taylor v Johnson. Both parties expressed that they wished to effect amendments to mirror evidence that had been adduced in the proceedings. On the issue of his actual knowledge and communications with the other plaintiffs at the material time, I found his evidence unsatisfactory. 99 Like the somewhat arbitrary selection of the postal rule for ordinary mail, in the ultimate analysis, a default rule should be implemented for certainty, while accepting that such a rule should be applied flexibly to minimise unjustness. The plaintiffs are, however, entitled to the cost of the amendments, in any event, which I fix at $1,000. One circumstance falling clearly within the equitable jurisdiction of the Court to relieve against mistake is that where one party, knowing of the others mistake as to the terms of an offer, remains silent and concludes a contract on the mistaken terms: It is not necessary to prove actual knowledge on the part of the non-mistaken party in order to ground relief, as, In summary therefore, the equitable jurisdiction of the Courts to relieve against mistake in contract comprehends situations where one party, who knows or ought to know of anothers mistake in a fundamental term, remains silent and snaps at the offer, seeking to take advantage of the others mistake. I find it inconceivable, to say the least, that the fifth plaintiff would have placed an order for 100 laser printers without the conviction that it was in fact a current market model with a real and substantial resale value. It had consciously not inserted any limits to the number of products a buyer could purchase again, quite clearly, to solicit more business. There were no such discussions with potential buyers. The non-mistaken partys appreciation that there is no real offer on the contracts literal terms undermines the basis of the objective theory and necessarily imports the lack of subjective intention on the part of the mistaken party. A real product number HP9660A was inserted in the new template as the prototype for which fictional prices were to be changed on the three relevant websites. For example, in the Singapore High Court decision of Chwee Kin Keong v Digilandmall.com Pte Ltd [2004] 2 SLR 594 ("Digilandmall"), affirmed on appeal in Chwee Kin Keong v Digilandmall.com Pte Ltd [2005] 1 SLR 502 without considering this particular issue, V K Rajah JC (as he then was) observed, as follows (at [139]): Case name. They then argue that as equitable defences have not been pleaded, the court has no alternative but to allow the claim. Evidence was given that if phone calls were indeed placed, they would from time to time limit the number of sales. Indeed, upon re-examination, he attempted to distance himself from the portion of his affidavit suggesting that the possibility of a genuine mistake had crossed his mind after the first transaction. 20 Annexed to this e-mail was the first plaintiffs earlier mass e-mail. The initial order for 30 laser printers was placed at round 3.45am while the second order for 300 units was placed at around 3.53am. Indeed, in difficult cases, the courts in several common law jurisdictions have gone to extraordinary lengths to conjure up consideration. When, however, the cases provoked by these factual situations are analysed, they will be seen to fall, not into three, but only two distinct legal categories. Chwee Kin Keong v. Digilandmall.com Pte. There was a promise to pay made by the plaintiffs in exchange for the delivery of the requisite laser printers. They have taken into account both the English and Australian authorities in distilling the jurisprudence in this area. Cases of fraud and misrepresentation, and undue influence, are all catered for under other existing and uncontentious equitable rules. 122 For now it appears that a mistaken party can have two bites at the cherry. After receiving the e-mail from the first plaintiff, he visited the relevant HP website pages. Prior to this he was an associate in the Intellectual Property and Technology Department of Allen & Gledhill. Case Summary 62 Like the second plaintiff, the fifth plaintiff played a pivotal role in the events leading to these proceedings. 22 The exchange between the first plaintiff and Desmond provides an intimate and revealing insight into the first plaintiffs thought process at the material time; the exchange fluctuated between bantering on the one hand, to nothing short of the candid exchange of thoughts on the other, revealing that the first plaintiff was fully aware of the likely existence of an error in pricing. 46 He was therefore aware, even before he made his first purchase, that the actual price of the laser printer was in the region of US$2,000. In-house law team, Chwee Kin Keong v Digilandmall.com Pte Ltd [2005] 1 SLR(R) 502, Contract unilateral mistake Internet Contract Consensus ad Idem Meeting of the Minds Acceptance Offer Void Error. 5 A related website for corporate clients and re-sellers (the Digiland commerce website) is owned and operated by a related entity, Digiland International Limited (DIL). His evidence pertaining to the material points of knowledge and his communications with the other plaintiffs lacked credibility. Nor could he satisfactorily explain why he initially made the Internet searches to ensure the offer was genuine. There is however much to be said in favour of rationalising the law of mistake under a single doctrine incorporating the best elements of common law and equity. This could account for the substantial number of Canadian cases in this area of the law. When giving evidence, he struck me as cautious, taking great pains to convey the impression that his numerous online enquiries that morning were routinely carried out without any real inkling that an error had occurred. The issue in this case was whether the pricing was a mistake and if the contract would be fulfilled. Counsels approach is flawed. v . He admitted in cross-examination to being the lawyer for this group of people when they had questions like these in the present proceedings. It was found that the plaintiffs must have known or realised that the offer did not express the true intention of the defendants. In support of the latter it might be argued that unlike a posting, e-mail communication takes place in a relatively short time frame. The credit card payments had not been processed. 36 The second plaintiff was the key person and pivotal in the entire chain of events. As most web merchants have automated software responses, they need to ensure that such automated responses correctly reflect their intentions from an objective perspective. Chwee Kin Keong vs Digilandmall.com - Free download as Powerpoint Presentation (.ppt / .pptx), PDF File (.pdf), Text File (.txt) or view presentation slides online. They proceeded to file their amendments to the statement of claim as if leave had already been given. In doing so, they appear to have also conflated equitable and common law concepts. . While commercial entities ought not to be given a licence to relax their vigilance, the policy considerations in refusing to enforce mistaken agreements militate against attaching undue weight to the carelessness involved in spawning the mistake. Having expressed my views on consideration, I should also add for good measure that, in any event, there is ample consideration. The element of constructive knowledge based upon what a reasonable person ought to know is premised upon that person not being conscious of the error. Caveat emptor remains a cornerstone of the law of contract and business relationships. Having noted all this, I am nevertheless inclined towards the views expressed in the Great Peace Shipping case for the reasons articulated by Lord PhillipsMR. 54 The fourth plaintiff admits that he had entertained the idea at the material time that the price posting could have been an error. It is simply inconceivable that when he entered into the purchase transaction, he did not know, or at the very least did not have a real and abiding belief that the price posting was an error. Being fully conscious of the pivotal nature of this point, I have duly accorded particular attention to the evidence and credibility of each of the plaintiffs. 2 [2004] 2 SLR 594 ("the Digilandmall case") (The decision was very recently affirmed by the Singapore Court of Appeal in Chwee Kin Keong v Digilandmall.com Pte Ltd [2005] SGCA 2, albeit on somewhat different grounds and where the focus was on the law of unilateral mistake rather than formation of contract.)]. Gill & Duffus Landauer Ltd v London Export Corp GmbH [1982] 2 Lloyd's Rep. 627. 101 RSS Intellectual Property Office of Singapore Expand/Collapse. This can be supported by the decision of the High Court of Singapore in the case of Chwee Kin Keong v. Digilandmall.com Pte Ltd, in which Judicial Commissioner Rajah argued that "the party who selects the means of communication should bear the consequences of any unexpected events" . If there appears to be no reasonable explanation for an absurd price discrepancy, it is axiomatic that any hasty conduct, such as the plaintiffs, in snapping up products, should be punctiliously scrutinised and dissected. The law may not imply a condition precedent as to the availability of stock simply to bail out an Internet merchant from a bad bargain, 104 The creases over the theoretical approach to adopt in determining the existence of contracts have for some time now been decisively ironed out in favour of the objective theory. The notation in the checkout-order confirmation further confirmed that the defendants concern was with the delivery time rather than with qualifying its obligation by reference to stock availability as a condition precedent. 45 The most telling aspect of the third plaintiffs evidence is his admission that he made Internet searches relating to the pricing of the laser printer, immediately after he was contacted by the first plaintiff. The law will have to organically adapt itself to respond to new challenges without compromising on certainty and fairness. It is, in large measure, determined by making an objective appraisal of the exchanges between the parties. 39 The sequence of orders placed by the second plaintiff in the short space of an hour and a half deserves some mention. Transactions over websites are almost invariably instantaneous and/or interactive. 151 The claims by the plaintiffs are audacious, opportunistic and contrived. The payment mode opted for was cash on delivery. No harm trying right? He is currently employed as an accountant in an accounting firm, Ernst & Young. The businessmen saw a great opportunity and grabbed it placing an order for 1,000 printers. From time to time they communicate with each other, 4 The defendant is a company that sells information technology (IT) related products over the Internet to consumers. http://www.epinions.com/HP_Color_LaserJet_4600_Series_Printer_Printers. 75 Each of the automated confirmatory e-mail responses carried under Availability of product the notation call to enquire. Copyright 2003 - 2023 - LawTeacher is a trading name of Business Bliss Consultants FZE, a company registered in United Arab Emirates. Mistakes that negative consent do not inexorably result in contracts being declared void. be rebutted" (per Salmon LJ in Jones v. Padavatton (1969)). 102 Inevitably mistakes will occur in the course of electronic transmissions. He also participates in multi-level marketing of Bel-Air aromatherapy products. The modern approach in contract law requires very little to find the existence of consideration. [2005] 1 SLR(R) Chwee Kin Keong v Digilandmall Pte Ltd 521. whether constructive knowledge by a non-mistaken party of the mistake would suffice to vitiate the contract ab initio. Claiming he was in a light-hearted kind of mood during his ICQ (acronym for I-Seek-You) conversation with Desmond, he insisted that this conversation should be taken neither seriously nor literally. Web merchants ought to ensure that they either contract out of the receipt rule or expressly insert salient terms within the contract to deal with issues such as a choice of law, jurisdiction and other essential terms relating to the passing of risk and payment. When pressed why he asked MsToh to do this research, the fifth plaintiffs response was unsatisfactory. He is described by his counsel in submissions as a prudent and careful person. Having ascertained the true market price, it would have appeared crystal clear, given the huge disparity in the pricing, that a manifest mistake had occurred. Indeed, in difficult cases, the courts in several common law jurisdictions have gone to extraordinary lengths to conjure up consideration.
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