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This assertion is patently untrue. 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. 118 The Canadian courts have been the most active common law courts explicating and developing this area of the law. Given that he left everything in the third plaintiffs hands, his legal position is, to that extent, identical to the third plaintiffs. By their own admission, they made Internet searches through various search engines to ascertain the profits they could make. The recipients of this e-mail included the second, fourth, fifth plaintiffs and Tan Cheng Peng, the third plaintiffs girlfriend. Phang, Controversy in Common Mistake [2003] Conv 247; Reynolds, Reconsider the Contract Textbooks (2003) 119LQR 177. At 4.16am he placed another order for one laser printer, by credit card, on the HP website. The object of the exercise is to determine what each party intended, or must be deemed to have intended. Case law Chwee Kin Keong v Digilandmallcom Pte Ltd suggests that General Rule. 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 decision of V.K. Chwee Kin Keong v Digilandmall.com (2005) - Singaporean case 3d printers sold for $66 instead of $3,800. She opined that situations where unilateral mistake had been considered were those involving fraud or a very high degree of misconduct. The payment mode opted for was cash on delivery. Homestead Assets Sdn Bhd v. Contramec . The bites, however, may taste quite different and cause different sensations. This is a disingenuous contention that desperately attempts to palliate their conduct in the subject transactions. 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. The other school of thought views the approach outlined earlier with considerable scepticism. He is currently employed as an accountant in an accounting firm, Ernst & Young. The defendant, on the other hand, contends that the law should not penalise a party who has unwittingly and genuinely made a unilateral mistake which was known or ought to have been known by the plaintiffs. This is in contrast to the English position where after several decades, 125 The principal source of this view has been Lord DenningMR. The defendant has expressly pleaded unilateral mistake. In addition, Tan Cheng Peng, the girlfriend and business associate of the third plaintiff, filed an affidavit detailing her communications with him. Lord Griffiths in Ketteman v Hansel Properties Ltd [1987] AC 189 at 220 stated: [T]o allow an amendment before a trial begins is quite different from allowing it at the end of the trial to give an apparently unsuccessful defendant an opportunity to renew the fight on an entirely different defence. He was also involved in initiating the Channel NewsAsia report (see [78] and [79], 77 Soon after the defendant informed the plaintiffs that they did not intend to deliver the laser printers, the plaintiffs took their claims to the press. Chwee Kin Keong v Digilandmall.com Pte Ltd [2004] 2 SLR(R) 594; [2004] 2 SLR 594 (refd) Gay Choon Ing v Loh Sze Ti Terence Peter [2009] 2 SLR(R) 332; [2009] 2 SLR 332 The contract stands according to the natural meaning of the words used. I must add that I did not really think this was necessary and subsequent events confirmed my perception. The terms of the offer are clear and unambiguous and the offeree accepts the offer according to its true sense, but it must have been obvious (and known by the offeree) that the offeror did not intend to make an offer in those terms. It was found that the plaintiffs must have known or realised that the offer did not express the true intention of the defendants. It is asserted that since mistake had not been pleaded as an equitable defence, equity cannot be invoked by the defendant. Though he initially denied this in cross-examination, he had to accept this when confronted with his own e-mail as irrefutable evidence. He acknowledged having had conversations with the other plaintiffs about how much money we can sell the printer and how much we can make and about storage space as well as how many units we intend to buy. Alarm bells would have sounded immediately. 91 There is no real conundrum as to whether contractual principles apply to Internet contracts. If anything, certain portions of the affidavits raised even more doubts about the plaintiffs credibility. He somewhat muddied the authority of his observations by apparently accepting in Gallie v Lee [1969] 2 Ch 17 at 33 (affirmed on appeal in Saunders v Anglia Building Society [1971] AC 1004) that in Cundy v Lindsay there was no contract at all. V K Rajah JC. The fifth plaintiff was also a member of this bridge group. Chwee KIN Keong AND Others v Digilandmall.COM PTE LTD [2004 ] SGHC 71 paginator.book page 594 tuesday, november 2009 7:05 am 594 singapore law reports (reissue . 87 It appeared to me that the extract from Singapore Civil Procedure 2003 relied on by the plaintiffs was blindly lifted from earlier editions of the English White Book without any consideration as to how it dovetails with the present procedural climate. reference was made by the court to "fraud or a very high degree of misconduct" before the non- mistaken party could be . 67 MsToh subsequently did some research on how companies which had committed similar mistakes over the Internet handled the aftermath. They assumed that to be the position. The effect of Solle v Butcher [1950] 1 KB 671 is not to supplement or mitigate the common law: it is to say that Bell v Lever Bros Ltd was wrongly decided. It has been pointed out that the pedigree of these decisions is dubious, to say the least (see [128] and [129] infra). It appears that in Convention transactions, the receipt rule applies unless there is a contrary intention. These orders were placed at a price of S$66 each, whereas the actual price was S$3,854 each. In submissions, his counsel attempted to play down the significance of both this conversation as well as the mass e-mail. When pressed as to whether he visited other websites, he said he could not confirm that one way or the other. After establishing from the web pages that the price quoted for the laser printer was indeed $66, he proceeded to make searches through search engines like Yahoo and visited the website of Hardware.com. six plaintiffs ordered 1,606 printers. 143 The stark gaping difference between the price posting and the market price of the laser printer would have made it obvious to any objective person that something was seriously amiss. Desmond: 13/01/20 01:47 wasnt greedy before I tok to u. Scorpio: 13/01/20 01:47 yeah.. S$1 mio then no need to work liao?? CHWEE KIN KEONG v DIGILANDMALL.COM Pte Ltd (2005) SGCA 2. Indeed this appears to be the underlying rationale for the unique legal characteristics attributed to an invitation to treat; see. The defendant programmed the software. Furthermore, unlike a fax or a telephone call, it is not instantaneous. The jurisdiction asserted in the former case has not developed. The Instantaneous Transmission of Acceptances. The third plaintiff informed him that laser printers were being sold at $66 each and that these laser printers could be sold at a much higher price about a thousand plus. 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. They were high-end commercial laser printers. Interestingly, Desmond also remarked to the first plaintiff that he wasnt greedy before I tok to u. chwee kin keong and others digilandmall.com pte ltd sghc 71 case number suit decision date 12 april 2004 high court coram rajah jc counsel name(s) tan sok ling Skip to document Ask an Expert Sign inRegister Sign inRegister Home Ask an ExpertNew My Library Discovery Institutions Republic Polytechnic London School of Business and Finance [The Myth of Mistake in the English Law of Contract (1954) 70LQR 385 at 396]. 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. Part of the training module included hands-on training with a new template for a Price Mass Upload function. 97 Different rules may apply to e-mail transactions and worldwide web transactions. The following excerpt is particularly significant and compelling: 23 The subsequent exchange further clarifies that the first plaintiff was fully conscious of the potential profit element arising from the purchase of a substantial number of the laser printers. However, at the actual hearing of the applications, plaintiffs counsel opposed any amendments whatsoever to the defence and sought leave to withdraw the plaintiffs earlier unilateral amendments. Inflexible and mechanical rules lead to injustice. This is one of the first prominent case that deals with the issue of web based contract. u think this is the 1970s?? 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. The defendant, Digilandmall.com Pte Ltd, were an online IT company that sold related software and hardware from Singapore. 33 See the Singapore Court of Appeal decision of Chwee Kin Keong v Digilandmall.com Pte Ltd[2005] 1 SLR 502 (noted by Yeo, TM ' Great Peace: a distant disturbance ' (2005) 121 Law Quarterly Review 393 Google Scholar; KFK Low 'Unilateral mistake at common law and in equity' [2005] Lloyd's Maritime and Commercial Law Quarterly 423; and PW . Free resources to assist you with your legal studies! There are in this connection two schools of thought. 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. When considering the appropriate rule to apply, it stands to reason that as between sender and receiver, the party who selects the means of communication should bear the consequences of any unexpected events. 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.)]. In short, where does the justice reside? There can be no other reasonable explanation. This can result from human interphasing, machine error or a combination of such factors. Counsels approach is flawed. Introduction The decision of V.K. One reason for this is the eternal tension faced by courts and judges alike in seeking a just equilibrium between commercial certainty and justice in a particular case. chwee kin keong v digilandmall high court. It is essential that the law be perceived as embodying rationality and fairness while respecting the commercial imperative of certainty. In some unusual circumstances where a unilateral mistake exists, the law can find a contract on terms intended by the mistaken party. 154 Interestingly, of the 784 persons who placed 1,008 orders for 4,086 laser printers, only these six plaintiffs have attempted to enforce their purported contractual rights. So its going to be our reputation at stake, we thought we had a successful transaction.. In his initial affidavit he admitted wondering whether the price was a mistake after his first order was placed. 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]. But it is difficult to see how that can apply here. There is no larger noble principle, such as the sanctity of contracts, to be observed or protected in these proceedings. In terms of chronological sequence, the initial page accessed was the shopping cart, followed by checkout-order particulars, checkout-order confirmation, check-out payment details and payment whether by cash on delivery or by credit card. 100 There is however another statute that ought to be taken into consideration in determining the appropriate default rule in e-commerce transactions. A prospective purchaser is entitled to rely on the terms of the web advertisement. This price was much lower than the actual retail price, and had been posted on the defendant's website by mistake. It can be noted, however, that while s15 of the ETA appears to be inclined in favour of the receipt rule, commentaries indicate that it is not intended to affect substantive law. 48 The third plaintiff annexed to his affidavit the transcript of the Channel NewsAsia report where he was quoted. 30 Tan Wei Teck is 30 years old. After the second plaintiff read out some of the terms and conditions he had found, the fifth plaintiff told him that the contract was binding upon a successful purchase order being received. Nor should parties regard pleadings as assuming an amoeba-like nature, susceptible to constant reshaping. He placed his first order for 50 units at about 2.58am, and his second order for another 50 units at 3.22am, again through the HP website. 140 The defendant has however properly asserted that there was a unilateral mistake that vitiated all the contracts. By their own admission, they made Internet searches through various search engines to ascertain the profits they could make. 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. Notwithstanding, the defendant does not take issue with this as the sixth plaintiffs orders were received and the appropriate automated responses generated. It was held that the contract between the parties was void. This final mass e-mail only reinforces my view that the first plaintiff consistently and continuously entertained the view that the price posting on the HP website was a mistake. *You can also browse our support articles here >. 86 In cases where the facts raised in the proposed amendments have been addressed during the evidence and submissions and, particularly, where the opposing side has also had an opportunity to address the very same points, there can hardly ever be any real prejudice. In Chwee Kin Keong v. Digilandmall.com Pte Ltd , 1 one of the defendant's employees mistakenly uploaded the contents of a training template onto the defendant's website, resulting in the retail price of S$3,854 for a commercial laser printer on the website being replaced with the figure S$66. The affidavits did not add anything new. After hearing their evidence, observing them and considering the submissions made on their behalf, there was no doubt in my mind that they were fully conscious that an unfortunate and egregious mistake had indeed been made by the defendant. He seemed to suggest that in a number of cases going as far back as, He somewhat muddied the authority of his observations by apparently accepting in, 126 The Australian courts appear to have relied on the views of Lord DenningMR in, 127 The attempt to conflate the concept of common law mistake and the equitable jurisdiction over mistake is understandable but highly controversial. The fact that the acceptance was automatically generated by a computer software cannot in any manner exonerate the defendant from responsibility. There must be consensus ad idem. 327. Chwee Kin Keong and Others v Digilandmall.com Pte Ltd [2005] SGCA 2 Civil Procedure - Costs - Principles - Respondent failing in every aspect of defence except on issue of unilateral mistake - Trial judge awarding full costs to respondent - Whether respondent entitled to full costs Decisions cannot be reconciled and expressions, terminology and phraseology in different decisions mean different things to different courts and even judges within the same judicial systems. He was also a partner in what is described as a printing business. He is also a director and shareholder in a company engaging in wholesale trade, together with the second and third plaintiffs. The defendants wanted to sell some hare skins to the plaintiffs. Given his professional and business background, he must have realised that the $66 price posting on the HP website was an error. 58 The fifth plaintiff was first informed by the second plaintiff at about 2.30am about cheap laser printers being available for purchase. 17 Having called the second and third plaintiffs at about 2.00am, the first plaintiff also sent them, via e-mail, a weblink of the relevant HP website pages. Caveat emptor remains a cornerstone of the law of contract and business relationships. - See also Balfour v. Balfour (1919). I categorically reject their evidence in so far as it attempts to hermetically compartmentalise their knowledge and discussions. The reason for this inconsistent conduct surfaced later. Indeed, in difficult cases, the courts in several common law jurisdictions have gone to extraordinary lengths to conjure up consideration. case concerning the purchase of laser printers from an online retailer, Chwee Kin Keong v Digilandmall 76 : To effect the purchase transactions on the respective websites, the plaintiffs had to navigate through several web pages. 128 The most significant judicial pronouncement supporting this view emanates from the recent English Court of Appeal in Great Peace Shipping Ltd v Tsavliris Salvage (International) Ltd [2003] QB 679, a case of common mistake. Inflexible and mechanical rules lead to injustice. To my mind, the confirmation through the subsequent searches that the actual price of the laser printer was, in fact, US$2,000 would, if anything, have affirmed his belief that an error had occurred. The present article analyses the many important issues that are raised by what is probably the first case on Internet mistake - the Singapore High Court decision of Chwee Kin Keong v Digilandmall.com Pte Ltd [2004] 2 SLR 594. Evidence was given that if phone calls were indeed placed, they would from time to time limit the number of sales. Application of such a rule may however result in contracts being formed outside the jurisdiction if not properly drafted. He is currently a supervisor in the taxation department of an international accounting firm, Deloitte & Touche, specialising in corporate taxation services. 80 Upon the conclusion of submissions, I directed counsel to appear before me. He conducted the searches to ascertain what the laser printers true price was. It is pertinent to note that she placed orders for 32 laser printers including 20 units she ordered on behalf of her sister. They are not mechanical rules to be applied in a vacuum, devoid of a contextual setting. Before retiring for the night, the first plaintiff had a further discussion with the second plaintiff on how to store the laser printers they had ordered. 71 The sixth plaintiffs position can be dealt with very briefly. There is one important exception to this principle. COOKE v OXLEY (1790) 3 T. R. 653. His communications with the fifth plaintiff, a lawyer, on the efficacy of the terms and conditions also lead to the ineluctable conclusion that he harboured anxieties whether this astoundingly good deal would be honoured when the error was discovered. The plaintiffs attempted to take advantage of the defendants mistake over the Internet. Desmond: 13/01/20 01:41 u want it for profit or personal use? The decision of the British Columbia Court of Appeal in, 25 The law of mistake was discussed in depth by McLachlinCJBC in. A typical but not essential defining characteristic of conduct of this nature is the haste or urgency with which the non-mistaken party seeks to conclude a contract; the haste is induced by a latent anxiety that the mistaken party may learn of the error and as a result correct the error or change its mind about entering into the contract. 83 The defendant maintained that there was no element of surprise and/or prejudice arising from the amendments. They stoutly assert that they were too preoccupied with the realisation of potential profits through a so-called arbitrage position between different markets to contemplate that an error had been made. He claimed he wanted to find out how much profit he could make. 132 It can be seen from this brief excursus into the law of mistake that this is an abstruse area. The price for equitable justice is uncertainty. 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. Promotions would be indicated by a P inside a yellow circle next to the product in question. 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. There is often, but not inexorably, a co-relationship between the timing when the amendment is sought and the adverse consequences for the other party. His revelation that he did not know if this is an error or whether HP will honour this purchase, not to mention the articulation of his hope that by the time you see this email, the price is still at S$66.00, 27 The first plaintiff obviously took the view that the advertisement should be acted upon urgently. The question is what is capable of displacing that apparent agreement. The only court judgement on the theme is Chwee Kin Keong v. Digilandmall.com Pte Ltd, a judgement of the Singapore High Court. The rationale for this is that a court will not sanction a contract where there is no consensus ad idem and furthermore it will not allow, as in the case of unilateral mistake, a non-mistaken party to take advantage of an error which he is or ought to be conscious of. 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. Chwee Kin Keong and others v Digilandmall.com Pte Ltd [2005] 1 SLR(R) 502; [2005] SGCA 2. Secondly, widening the scope of mistake, unilateral or otherwise, under the rubric of equitable mistake will, with its malleability, only encourage uncertainty and litigation. They are described by their counsel in submissions as risk takers, business minded and profit seeking. 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. As most web merchants have automated software responses, they need to ensure that such automated responses correctly reflect their intentions from an objective perspective. 114 For good measure, I should allude that the plaintiffs in their written submissions concede that in order to establish that mistake is operative at common law, the defendant has to show in this instant case that the plaintiffs each had actual or constructive knowledge of the mistaken pricing. The prospective buyer has to make an offer to purchase which is then accepted by the merchant. HIGH COURT. 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. Desmond intimated that the defendant would give vouchers or special deals as a matter of equitable compensation should it not honour the purchase orders. In the context of its true market value the absurd price of $66 was almost the commercial equivalent of virtually giving away the laser printers. 146 A purchaser in a case of apparent unilateral mistake, who purchases for genuine own use a product, may not always be viewed as guilty of engaging in snapping up. This constituted more than a quarter of the total number of laser printers ordered. 149 It is clear from the authorities reviewed that such a contract, if entered into by a party with actual or presumed knowledge of an error, is void from the outset. 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. http://www.epinions.com/HP_Color_LaserJet_4600_Series_Printer_Printers. In Chwee Kin Keong v Digilandmall.com Pte Ltd, the Singapore Court of Appeal was asked to consider if the decision in Great Peace Shipping also had the effect of excluding equity's jurisdiction . Any opinions, findings, conclusions, or recommendations expressed in this material are those of the authors and do not reflect the views of LawTeacher.net. Where common mistake is pleaded, the presence of agreement is admitted. He too affirmed from his searches that the normal price of the laser printer was in the region of US$2,000. This, in a nutshell, is the issue at the heart of these proceedings. The contract was held to be void because there was no consensus on the terms. I have carefully considered the issue of costs and have noted that the defendant had, in the process of mounting a root and branch attack on the plaintiffs claim, pursued some unmeritorious contentions. 153 These statements of jurisprudence are of cardinal importance in understanding and fashioning the law of contract. Transactions over websites are almost invariably instantaneous and/or interactive. The court held that the acceptance has been completed once it is posted although here, the defendants actually did not receive the letter before they sold it to someone else. Indeed, in difficult cases, the courts in several common law jurisdictions have gone to extraordinary lengths to conjure up consideration. There was no element of surprise or prejudice to the plaintiffs as the points raised had already been developed by the defendant and addressed by the plaintiffs. 62 Like the second plaintiff, the fifth plaintiff played a pivotal role in the events leading to these proceedings. He made Internet search enquiries as to whether the printer model existed and at what price it could be resold. In effect the Internet conveniently integrates into a single screen traditional advertising, catalogues, shop displays/windows and physical shopping. The plaintiffs also assert in their submissions that if contracts are only upheld if parties acted honourably there would be very few contracts left standing in the commercial world. The answer on the authorities is a mistake by one party of which the other, 111 This approach appears to have been endorsed by Judith PrakashJ in, 114 For good measure, I should allude that the plaintiffs in their written submissions concede that in order to establish that mistake is operative at common law, the defendant has to show in this instant case that the plaintiffs each had, 115 There is a distinct line of cases within the narrow confines of unilateral mistake where the common law has been resolutely disinclined to enforce apparent contracts. A court will not enforce the plaintiffs purported contracts even if they are not void.