Nor is it disputed that Samuel Teo, or any of the other employees of the defendant, was unaware at all material times of the dramatic chain of events so unwittingly initiated by the former. He made Internet search enquiries as to whether the printer model existed and at what price it could be resold. The recipients of this e-mail included the second, fourth, fifth plaintiffs and Tan Cheng Peng, the third plaintiffs girlfriend. Cases of fraud and misrepresentation, and undue influence, are all catered for under other existing and uncontentious equitable rules. There is no merit at all in this contention. While a court of law does not sit as a court of commercial morality, it cannot lose sight of this central objective of contract law. 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 individualistic ethic seeks to maximise individual goals and the community ethic seeks to set norms for commercial morality and to ensure that fair dealing and community cohesiveness are observed and maintained. 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" . 151 The claims by the plaintiffs are audacious, opportunistic and contrived. He tried to convey the impression that it never struck him that a mistake in the price posting of the laser printer could have occurred. In the High Court, the learned judge ("the Judge") decided, in the main, in favour of the Purchaser. The e-mail was given a high importance priority and captioned go load it now!!. It is not necessary to prove actual knowledge on the part of the non-mistaken party in order to ground relief, as in this context one is taken to have known what would have been obvious to a reasonable person in the light of the surrounding circumstances: Hartog v Colin and Shields [1939] AllER 566 (KBD); McMaster University; Stepps Investments, supra; Taylor, supra. The decision of V.K. 52 He then called the second plaintiff on his handphone and informed him that he intended to purchase 50 laser printers. This contention is wholly untenable. The price for equitable justice is uncertainty. He then zealously sent at about 2.58am, an e-mail to 54 persons, all of whom were friends and/or business associates. It is plain that the defendant had given careful consideration to this issue and was prepared to contract on the basis that it would be able to comply with any orders hence, there was no reference to any order being subject to stock availability. MrTan said: As long as we get out [sic] equitable compensation, we should be able to accept lesser terms, but thats just under consideration as well.. 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. Desmond: 13/01/20 01:41 u want it for profit or personal use? 126 The Australian courts appear to have relied on the views of Lord DenningMR in Solle v Butcher to establish a wholly different doctrinal approach to mistake and have purportedly applied a fused concept of law and equity to the law on mistake. I do not accept that there were no discussions between them on the price posting being an error. 1 In the early hours of the morning of 13January 2003, six friends, the plaintiffs in this case, placed orders over the Internet for 1,606 sophisticated Hewlett Packard commercial laser printers (the laser printer(s)). If coherence is to be restored to this area of our law, it can only be by declaring that there is no jurisdiction to grant rescission of a contract on the ground of common mistake where that contract is valid and enforceable on ordinary principles of contract law. Not all one-sided transactions or bargains are improper. Needless to say, he could not satisfactorily explain why his previous solicitors had formed such a view when preparing his affidavit and why he had affirmed the same. Quite apart from this singularly precise timing, his exchange with Ms Toh is noteworthy for the following reason: when he told her about the various concluded purchases of the laser printers, she immediately thought it was a mistake and that HP would not honour the contracts. Application of such a rule may however result in contracts being formed outside the jurisdiction if not properly drafted. The defendant was entitled to stake its entire defence on the basis of common law, though it would have been prudent ex abundanti cautela to have asserted the equitable position in the alternative. 102 Inevitably mistakes will occur in the course of electronic transmissions. Added to his own purchases of 760 units, he was effectively responsible for the purchase of 1,090 laser printers. The defendants wanted to sell some hare skins to the plaintiffs. Transactions over websites are almost invariably instantaneous and/or interactive. The elements of an offer and acceptance are ex facie satisfied in every transaction asserted in the plaintiffs claims. 4, 1971, p. 331. Chwee Kin Keong v Digilandmall Pte Ltd The defendant, Digilandmall.com Pte Ltd, were an online IT company that sold related software and hardware from Singapore. In effect the Internet conveniently integrates into a single screen traditional advertising, catalogues, shop displays/windows and physical shopping. The credit card payments had not been processed. The point is, there is a chasm between a clarification amendment and a new or distinct issue being raised at a later stage. 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. 110 In OT Africa Line Ltd v Vickers Plc [1996] 1Lloyds Rep 700 at 703, ManceJ held that the objective theory ought not to apply if a party had knowledge that a mistake had occurred: The question is what is capable of displacing that apparent agreement. Normally the contract is only concluded when the acceptance is communicated by the offeree to the offeror. . Chwee Kin Keong v Digilandmall.com Pte Ltd [2004] 2 SLR 594; [2004] SGHC 71. They are all well-educated professionals articulate, entrepreneurial and, quite bluntly, streetwise and savvy individuals. 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 appears that it wanted to leave no stone unturned and had therefore mounted a root and branch attack on the plaintiffs claims. He worked for a short period in the IT Project Development department of the Standard Chartered Bank, where he became acquainted with the first plaintiff. The Instantaneous Transmission of Acceptances. Rules of court which are meant to facilitate the conduct of proceedings invariably encapsulate concepts of procedural fairplay. If anything, certain portions of the affidavits raised even more doubts about the plaintiffs credibility. 93 Website advertisement is in principle no different from a billboard outside a shop or an advertisement in a newspaper or periodical. There is therefore no pre-condition in law for a mistaken party to show an absence of carelessness to avail himself of this defence; the law precludes a person from seeking to gain an advantage improperly in such circumstances. 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. 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. 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. I agree that this exception should be kept within a very narrow compass. The issue could be critical where third party rights are in issue as in Shogun. 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 . 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. Mutual promises, by all accounts, on the basis of existing case law, more than amply constitute consideration. This case is a paradigm example of an error on the human side. 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. They have taken into account both the English and Australian authorities in distilling the jurisprudence in this area. Why? It is an important subject for the future development of English contract law. The modern approach in contract law requires very little to find the existence of consideration. 109 This cautious statement by Chitty needs to be carefully reconsidered in the context of recent developments in this area of law. 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. In terms of chronological sequence, the initial page accessed was the shopping cart, followed by checkout-order . 58 The fifth plaintiff was first informed by the second plaintiff at about 2.30am about cheap laser printers being available for purchase. In addition, Tan Cheng Peng, the girlfriend and business associate of the third plaintiff, filed an affidavit detailing her communications with him. CLARK, B. LOW, Kelvin Fatt Kin. The decision of the British Columbia Court of Appeal in 25659 BC Ltd v 456795 BC Ltd (1999) 171DLR(4th) 470 at [25] to [26], is instructive: 25 The law of mistake was discussed in depth by McLachlinCJBC in First City Capital Ltd v BC Building Corp (1989), 43BLR 29 (SC). 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. First, it is clear that the line of Australian and Canadian cases have broadened their equitable jurisdiction on the strength of dicta attributable principally to Lord Denning. They contended that the entire ICQ conversation, infused with such a jocular tone, should be disregarded. 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. This was presumably to render the training more lifelike. Cory had chosen this mode of communication; therefore he Counsel however contends that even if this e-mail were to be read literally, this should not affect the first plaintiffs own purchase that had taken place an hour earlier. The transcript states that the third and the fifth plaintiffs saw a great opportunity and grabbed it. Thus, while the idea of snapping up may well apply in cases one side is aware of the other sides error, I do not think it can be applied literally in the constructive knowledge cases. be rebutted" (per Salmon LJ in Jones v. Padavatton (1969)). 92 The Electronics Transaction Act (Cap88, 1999Rev Ed) (ETA) places Internet contractual dealings on a firmer footing. 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. 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. Despite their familial relationship, the legal relationship between the two of them was that of agent and principal. It should be noted that while the common law jurisdictions continue to wrestle over this vexed issue, most civil law jurisdictions lean towards the recipient rule. The fourth plaintiff duly accessed the e-mail the second plaintiff had sent him pursuant to their conversation. In doing so, they appear to have also conflated equitable and common law concepts. I must add that I did not really think this was necessary and subsequent events confirmed my perception. 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. In the absence of proper and full arguments on the issue of which rule is to be preferred, I do not think it is appropriate for me to give any definitive views in these proceedings on this very important issue. Imagine the effect of this negative publicity on your future sales! In the context of the present proceedings, the extra-judicial observations of Lord Steyn in Contract Law: Fulfilling the Reasonable Expectations of Honest Men (1997) 113LQR 433 at 433 are particularly apposite: A thread runs through our contract law that effect must be given to reasonable expectations of honest men. When notified and satisfied that this transaction was successful as well, he placed a final order at 4.21am for ten laser printers on the HP website, charging this to his credit card. Chwee Kin Keong v Digilandmall.com Pte Ltd. Case Nos: Suit 202/2003/E (for the first instance), CA/30/2004 (for the appeal) in the High Court of Singapore (at first instance), Singapore Court of Appeal. 148 The circumstances under which the orders were placed and the quantities sought to be purchased wholly undermine counsels variegated contentions that the plaintiffs lacked knowledge of or belief in the existence of a mistake. Section11 of the ETA expressly provides that offers and acceptances may be made electronically. Rajah J.C. in the Singapore High Court in Chwee Kin Keong v. Digilandmall.com Pte. 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. Take a look at some weird laws from around the world! 78 In a Channel NewsAsia report datelined 15January 2003, it was reported that: Two of the customers, Mark Yeow and Malcolm Tan, have already spoken to their lawyers. The fact that the acceptance was automatically generated by a computer software cannot in any manner exonerate the defendant from responsibility. (See for example the approach in Williams v Roffey Bros & Nicholls (Contractors) Ltd [1990] 1AllER 512.) This can result from human interphasing, machine error or a combination of such factors. 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. Philip Fong Yeng Fatt and Doris Chia Ming Lai (Harry Elias Partnership) for defendant, Chwee Kin Keong; Tan Wei Teck; Yeow Kinn Keong Mark; Ow Eng Hwee; Tan Chun Chuen Malcolm; Yeow Kinn Oei 63 It is pertinent he too made web searches using the Google search engine. Desmond: 13/01/20 01:33 how many u intend to get? The web merchant, unless he qualifies his offer appropriately, by making it subject to the availability of stock or some other condition precedent, could be seen as making an offer to sell an infinite supply of goods. 19 Later in the morning, at about 4.15am, the fourth plaintiff sent the following e-mail to the first plaintiff, copied to the second plaintiff only: Subject: Re: IMPT HP Colour LaserJet going at only $66!! The prospective buyer has to make an offer to purchase which is then accepted by the merchant. In the eyes of Singapore law, purported contracts entered into in similar circumstances are void ab initio. Furthermore, they relied on a passage from Singapore Civil Procedure 2003 (Sweet & Maxwell Asia, 2003) at para20/8/47 that asserts: At the trial leave to amend particulars will as a rule be refused (Moss v Malings (1886) 83ChD 603). Rajah J.C. in the Singapore High Court in Chwee Kin Keong v. Digilandmall.com Pte. Evidence was given that if phone calls were indeed placed, they would from time to time limit the number of sales. The plaintiffs could not coherently explain why neither they nor their lawyers had not attempted to correct the press reports at the material juncture. His evidence pertaining to the material points of knowledge and his communications with the other plaintiffs lacked credibility. 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. These statements are not to be interpreted as a clarion call to rewrite commercial agreements because of a partys unreasonable or ignoble behaviour. Desmond: 13/01/20 01:47 u make me greedy, Scorpio: 13/01/20 01:47 ok lor if you insist . six plaintiffs ordered 1,606 printers. 111 In Chwee Kin Keong v Digilandmall.com Pte Ltd [2005] 1 SLR(R) 502 ("Chwee Kin Keong"), this court said at [101]: Under O 20 r 5(1) of the Rules of Court (Cap 322, R 5, 2004 Rev Ed), the court may grant leave to amend a pleading at any stage of the proceedings. 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 businessmen saw a great opportunity and grabbed it placing an order for 1,000 printers. I note that there have been powerful arguments made to the contrary. 39 The sequence of orders placed by the second plaintiff in the short space of an hour and a half deserves some mention. Lord Griffiths in, 87 It appeared to me that the extract from, 88 The fact that the amending party has been tardy or even negligent is a factor that a court can (and in some egregious cases, should) take into account but this is by no means a decisive factor (, 95 The known availability of stock could be an important distinguishing factor between a physical sale and an Internet transaction. Any opinions, findings, conclusions, or recommendations expressed in this material are those of the authors and do not reflect the views of LawTeacher.net. I categorically reject their evidence in so far as it attempts to hermetically compartmentalise their knowledge and discussions. 54 The fourth plaintiff admits that he had entertained the idea at the material time that the price posting could have been an error. , In mutual mistake, the parties misunderstand each other and are at cross-purposes. However, not all principles will or can apply in the same manner that they apply to traditional paper-based and oral contracts. Where common mistake is pleaded, the presence of agreement is admitted. 136 First, it was suggested that no contracts had been formed as all the contracts were subject to availability and that a failure to adhere to the directive call to enquire prevented the contracts from coming into existence. Secondly, widening the scope of mistake, unilateral or otherwise, under the rubric of equitable mistake will, with its malleability, only encourage uncertainty and litigation. The payment mode opted for was cash on delivery. We are, Our conclusion is that it is impossible to reconcile, In this case we have heard full argument, which has provided what we believe has been the first opportunity in this court for a full and mature consideration of the relation between, 129 The careful analysis of case law undertaken by that court yields a cogent and forceful argument that Lord DenningMR was plainly attempting to side-step, 130 It can be persuasively argued that given (a)the historical pedigree of the cases, (b)the dictates of certainty and predictability in the business community and (c)the general acceptance of the existence of distinct common law rules, it is preferable not to conflate these concepts. Date of Verdicts: 12 April 2004, 13 January 2005. 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. Mistakes are usually synonymous with the existence of carelessness on the part of the mistaken party. I would not however invariably equate the required conduct with fraud. As a lawyer, he appears to have been indispensable in the plaintiffs attempts to hold the defendant to the bargain. It had consciously not inserted any limits to the number of products a buyer could purchase again, quite clearly, to solicit more business. 138 Effectively, the defendant was attempting in this contention to assert that it could have its cake and eat it as well. 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. The recipient rule appears to be the logical default rule. In Canada, the latter suffices. The contract was held to be void because there was no consensus on the terms. Despite the general views expressed in. There is no question, however, that he placed the orders, that these orders were received by the HP website and that the same automated response sent to the other plaintiffs was sent out to him. Indeed, the time may have come for the common law to shed the pretence of searching for consideration to uphold commercial contracts. The other school of thought views the approach outlined earlier with considerable scepticism. 26 It is clear from the priority status accorded to the e-mail that the first plaintiff was sharing his knowledge of a good deal. The issue could be critical where third party rights are in issue as in. Web Communication: A Review Of Chwee Kin Keong And Others v. Digilandmall.com pte ltd by Rokiah Kadir [2009] 8 CLJ xxi. You may find the status of your order by calling us at (phone number given) Special instructions: Please call to advise delivery date and time. 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, a fortiori in the sale of information and probably services, as the same constraints as to availability and supply may not usually apply to such sales. 156 The plaintiffs claims are dismissed. This gives their courts a broad and elastic jurisdiction to deal with commercially inappropriate behaviour. 96 In an Internet sale, a prospective purchaser is not able to view the physical stock available. Free resources to assist you with your legal studies! As most web merchants have automated software responses, they need to ensure that such automated responses correctly reflect their intentions from an objective perspective. The other school of thought views the approach outlined earlier with considerable scepticism. V K Rajah JC. 26 It is clear from the priority status accorded to the e-mail that the first plaintiff was sharing his knowledge of a good deal. 145 If the price of a product is so absurdly low in relation to its known market value, it stands to reason that a reasonable man would harbour a real suspicion that the price may not be correct or that there may be some troubling underlying basis for such a pricing. Where either mutual or unilateral mistake is pleaded, the very existence of agreement is denied. The other knows, or must be taken to know, of his mistake. 25 The mass e-mail at 2.58am is cursorily dismissed by counsel for the plaintiffs as poor use of language that ought not to be taken literally in light of the early hours of the morning. In a Straits Times report dated 15January 2003 captioned $66 printer error angry customers seek lawyers help, it was reported that the second plaintiff, described as a network marketer had on 13January at about 2.00am stumbled upon a offer he could not believe $66 for a Hewlett Packard laserjet printer that normally sells for $3,854 before GST. Unfortunately, they mistakenly offered the price at so much per pound in place of so much per piece. Who bears the risk of such mistakes? 117 It should be emphasised that this stream of authority is consistently recognised by all the major common law jurisdictions. Though the actual price of the laser printer was $3,854, the defendant had on 8January 2003 mistakenly posted the price at $66.00 on its websites. In the fifth plaintiffs affidavit evidence, he asserted emphatically and unequivocally that at no point did I ever think that the price of the printers were a mistake. 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. Such errors can be magnified almost instantaneously and may be harder to detect than if made in a face to face transaction or through physical document exchanges. After all, what would he do with 100 obsolete commercial laser printers? Leave was also given to the plaintiffs to adduce further evidence, if they so desired. Unilateral Mistake at . Other Jurisdictions. 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. 152 This view has also found support in the Singapore context. Their reference to arbitraging was a nebulous fig leaf designed to legitimise their conduct in a cloak of legal and commercial respectability. A court will not enforce the plaintiffs purported contracts even if they are not void. In short, where does the justice reside? This provision acknowledges that the essential framework of an electronic contract needs to be considered in the usual manner; in other words, principles of contract formation, consideration, terms and conditions, choice of law and jurisdictional issues need to be examined. Given its global reach and ever changing technological advancements, Internet usage will pose a myriad of issues for resolution. There were altogether 1,008 purchase orders for the laser printers placed by 784 individuals between 8 and 13January 2003. A steady stream of decisions from common law courts indicate a measured but nevertheless distinctly incremental willingness to extend the scope of the exception to not just actual knowledge, but deemed or constructive knowledge as well.
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