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. 53 He claimed that seeing the same price on the Digilandmall website confirmed his view that there had been no mistake. Registered office: Creative Tower, Fujairah, PO Box 4422, UAE. Certainly, none of them had ever been induced to conduct transactions on such a scale on the Internet for any product, let alone sophisticated commercial laser printers. He held that the Written Offer was accepted by the . I found his entire evidence relating to his communication with the first and other plaintiffs unsatisfactory and in many aspects incredulous. He conducted the searches to ascertain what the laser printers true price was. This new template was designed to facilitate instantaneous price changes allowing them to be simultaneously reflected in the relevant Internet web pages. He is also described as the sole proprietor and manager of two other businesses that provide business support and consultancy. In Chwee Kin Keong v . 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. 58 The fifth plaintiff was first informed by the second plaintiff at about 2.30am about cheap laser printers being available for purchase. (See for example the approach in Williams v Roffey Bros & Nicholls (Contractors) Ltd [1990] 1AllER 512.) Contract doctrine is substantially predicated upon achieving an ethical equilibrium between the individualistic ethic and community ethic in order to protect reasonable or legitimate expectations. Date of Verdicts: 12 April 2004, 13 January 2005. I found their attempts to play down the impact of the statements which they had, to all intents and purposes, willingly and deliberately made earlier, unconvincing. 44 He made his first purchase of ten laser printers at about 2.42am. The bites, however, may taste quite different and cause different sensations. [The Myth of Mistake in the English Law of Contract (1954) 70LQR 385 at 396]. It appears that he was also in touch with the fifth plaintiff as evidenced by an e-mail sent later that morning by the fifth plaintiff to both him and the second plaintiff containing research on what companies who had made similar Internet errors did. (c) the need to reach commercially sensible solutions while respecting traditional principles applicable to instances of genuine error or mistake. The second, third, fourth and sixth plaintiffs are the only individuals who ordered more than a hundred laser printers each. He was amicus curiae to the Court of Appeal of Singapore in the case of Chwee Kin Keong & Ors v Digilandmall.com Pte Ltd, the leading Singapore case on unilateral mistake in the digital environment. 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 A contract will not be concluded unless the parties are agreed as to its material terms. This was also the practice in the trade. NZULR, vol. Theoretically the supply of information is limitless. 681) when the court had to decide the moment of contr act formation by post. He opted to pay for all his purchases by cash on delivery. 70 The third plaintiff proceeded to place orders on behalf of the sixth plaintiff on the HP website. Do you have a 2:1 degree or higher? Scorpio: 13/01/20 01:33 as many as I can! 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. 62 Like the second plaintiff, the fifth plaintiff played a pivotal role in the events leading to these proceedings. The essence of snapping up lies in taking advantage of a known or perceived error in circumstances which ineluctably suggest knowledge of the error. 9 The defendants assertion that Samuel Teo had neither the authority nor the intention to make any alterations to the laser printers price is now accepted by the plaintiffs. The case of, The offer was wrongly expressed, and the defendants by their evidence, and by the correspondence, have satisfied me that the plaintiff, 116 The term snapping up was aptly coined by JamesLJ in, 117 It should be emphasised that this stream of authority is consistently recognised by all the major common law jurisdictions. 101 RSS Intellectual Property Office of Singapore Expand/Collapse. 98 Once an offer is sent over the Internet, the sender loses control over the route and delivery time of the message. While the first plaintiff was the source of the information concerning the price posting, the second plaintiff actively communicated with all of the plaintiffs (save the sixth plaintiff), throughout the material period. In addition, Tan Cheng Peng, the girlfriend and business associate of the third plaintiff, filed an affidavit detailing her communications with him. In this case, Defendant was selling IT products over internet in Singapore. I am not prepared, after full consideration, to assume that the reporters misquoted the facts. He appeared distinctly uncomfortable during several phases of his cross-examination and his answers on crucial points were evasive and often vague.. His evidence in relation to the level and nature of communications he had with the second and third plaintiffs on the morning in question lacked candour. 79 The second, third and fifth plaintiffs tried their best to distance themselves from the quotes attributed to them. 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. 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. Pages 74 Ratings 100% (5) 5 out of 5 people found this document helpful; ThompsonJ of the Ontario High Court applied Hartog v Colin & Shields ([115] supra) and held that the parties were not ad idem and found that no contract had been formed. This price was much lower than the actual retail price, and had been posted on the defendant's website by mistake. Application of such a rule may however result in contracts being formed outside the jurisdiction if not properly drafted. There was no satisfactory reason for the genesis of this e-mail (see [67] infra). I do not accept that there were no discussions between them on the price posting being an error. *You can also browse our support articles here >. 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. 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. 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. 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. A court is not likely to take a sympathetic view of such manner of amendment. There could be different considerations. [2005] 1 SLR (R) Chwee Kin Keong v Digilandmall.com Pte Ltd 507 printers. To that extent, his evidence that he subsequently dismissed the notion altogether is unacceptable. The contract stands according to the natural meaning of the words used. 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 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. 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 . There are many different shades of sharp practice or impropriety. Case name. 32 Satisfied with his enquiries in relation to the printer model, he returned to the HP website and placed an order for 100 laser printers at about 2.23am. So its going to be our reputation at stake, we thought we had a successful transaction.. The product descriptions in all the other pages of the respective websites, at the material time, carried a full detailed description of all advertised products. This constituted more than a quarter of the total number of laser printers ordered. ! with its importance set at high. The first, second and third plaintiffs have been friends for a long time and are bound by common business interests. He worked in an accounting firm, Ernst and Young, for three years. 138 Effectively, the defendant was attempting in this contention to assert that it could have its cake and eat it as well. This is without basis. . They have taken into account both the English and Australian authorities in distilling the jurisprudence in this area. Web Communication: A Review Of Chwee Kin Keong And Others v. Digilandmall.com pte ltd by Rokiah Kadir [2009] 8 CLJ xxi. It was the defendants computer system. 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. 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. In addition, he despatched e-mails to the fourth and fifth plaintiffs attaching a hyperlink to the HP website. Has an agreement been reached or not? I even went to both the HP Web-Site as well as the DigilandMall Web-site to see if the prices were the same. com Pte Ltd30 that was primarily about unilateral mistake. V K Rajah JC. They contended that the entire ICQ conversation, infused with such a jocular tone, should be disregarded. Upon completing this sequence, each of the orders placed by the plaintiffs was confirmed by automated responses from the respective websites stating Successful Purchase Confirmation from HP online. Though the six plaintiffs accounted for only 18 of these purchase orders, they figure prominently among the 11 individuals who ordered more than 50 laser printers. I was neither impressed nor convinced. Desmond: 13/01/20 01:41 u want it for profit or personal use? 144 I find, in the alternative, that the plaintiffs, given each of their backgrounds, would in any event, each have separately realised and appreciated, before placing their purchase orders, that a manifest mistake had occurred even if no communications on the error had taken place between them. Caveat emptor remains a cornerstone of the law of contract and business relationships. Loose language may result in inadvertently establishing contractual liability to a much wider range of purchasers than resources permit. They assert that spending only $105,996 to procure laser printers with an actual market value of $6,189,524 is wholly irrelevant; they are entitled to a good bargain. The court found that parties when . 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. On the issue of his actual knowledge and communications with the other plaintiffs at the material time, I found his evidence unsatisfactory. I cannot accept that. The programme trigger on that website automatically and instantaneously initiated the insertion of similar contents onto all three websites. The unconstrained exchange that followed between the two is both revealing and compelling. I would not however invariably equate the required conduct with fraud. This is approved in a Singaporean case, Chwee Kin Keong v Digilandmall.com Pte Ltd . Given its global reach and ever changing technological advancements, Internet usage will pose a myriad of issues for resolution. He had left everything to his brother. He was opportunistic in effecting his purchases, active in co-ordinating with the other plaintiffs on the eventful morning, and economical with the truth in his evidence. Whether the parties have reached agreement on the terms is not determined by evidence of the subjective intention of each party. Chwee Kin Keong vs Digilandmall.com - Free download as Powerpoint Presentation (.ppt / .pptx), PDF File (.pdf), Text File (.txt) or view presentation slides online. 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. It was listed at the price of $66, when it was advertised on the official HP website for $3,854. It will firstly discuss the fact that such a tort Our academic writing and marking services can help you! As a lawyer, he appears to have been indispensable in the plaintiffs attempts to hold the defendant to the bargain. 73 The sixth plaintiffs orders did not receive matching confirmations from the defendant as his e-mail box was full. 28 In any event, the first plaintiffs commercial background and business experience alone would have amply alerted him to the likelihood of the pricing being a mistake, even without his conversation with Desmond. I do not accept that there were no discussions between them on the price posting being an error. Rajah J.C. in the Singapore High Court in Chwee Kin Keong v. Digilandmall.com Pte. As part of its business, it operates a website owned by Hewlett Packard (HP) at http://www.buyhp.com.sg (the HP website) where only HP products are sold. 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. There are two types of orders relevant: market orders and limit orders. This may have created formatting or alignment issues. The fourth plaintiff duly accessed the e-mail the second plaintiff had sent him pursuant to their conversation. Has an agreement been reached or not? Market orders: order to be executed immediately at the best available price. [emphasis added]. This short but highly significant e-mail reads: Subject: IMPT HP Colour LaserJet going at only $66!! These orders were placed at a price of S$66 each, whereas the actual price was S$3,854 each. It does not purport to regulate e-commerce but attempts to facilitate the usage of e-commerce by equating the position of electronic records with that of written records, thus elevating the status of electronic signatures to that of legal signatures. While these contentions were well within the scope of the evidence adduced and their respective lines of cross-examination, they appeared to transgress their respective pleadings. 43 After receiving a call from the first plaintiff at about 2.00am informing him that he had found an opportunity to make money as there was an arbitrage position to be achieved for some Hewlett Packard printers, the third plaintiff duly accessed his e-mail and visited the HP website. Any reasonable person, given the extent of the knowledge and information the plaintiffs were armed with, would have come to a similar conclusion. It is important not to force into a Procrustean bed principles that have to be modified or discarded when considering novel aspects of the Internet. 31 He admitted receiving a call from the first plaintiff at about 2.00am but claimed the first plaintiff merely apprised him of a good deal. The law of agency and that pertaining to the formation of contracts are expressly recognised in s13(8) of the ETA as continuing to apply to electronic transactions. No harm trying right? In evidence he explained his conduct in the following manner: I felt that I had done all that was conceivably within my means to ensure that the Price was not a mistake. The first and fifth appellants each ordered a hundred printers, while the other appellants ordered more than a hundred printers each. 153 These statements of jurisprudence are of cardinal importance in understanding and fashioning the law of contract. His Internet research alone would have confirmed that. He has incorporated an Internet business Dreamcupid in which the second plaintiff has an interest. 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 object of the exercise is to determine what each party intended, or must be deemed to have intended. This contention is wholly untenable. 39 The sequence of orders placed by the second plaintiff in the short space of an hour and a half deserves some mention. 71 The sixth plaintiffs position can be dealt with very briefly. That said, it also offers new avenues of evidential proof offering intimate insights into realtime thought processes and reactions. 109 This cautious statement by Chitty needs to be carefully reconsidered in the context of recent developments in this area of law. The issue could be critical where third party rights are in issue as in. In the High Court, the learned judge ("the Judge") decided, in the main, in favour of the Purchaser. 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 When pressed why he asked MsToh to do this research, the fifth plaintiffs response was unsatisfactory. The plaintiffs were not being candid when they portrayed very limited exchanges between themselves, dealing allegedly with only the profits to be made and their ability to resell the laser printers. He made Internet search enquiries as to whether the printer model existed and at what price it could be resold. 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. I accept that this is capable of including circumstances in which a person refrains from or simply fails to make enquiries for which the situation reasonably calls and which would have led to discovery of the mistake. Court name Singapore High Court. Alternatively, knowledge may be readily inferred from what would be regarded as commonly known or notorious facts in the context of the transaction. 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. Palm tree justice will only serve to inject uncertainty into the law. So there is a contract and therefore the defendant is liable in breach of contract. In turn, the ICQ chat session involving the first plaintiff and the respective plaintiffs exchange of e-mails played a significant role in undermining their credibility and claims. As with any normal contract, Internet merchants have to be cautious how they present an advertisement, since this determines whether the advertisement will be construed as an invitation to treat or a unilateral contract. The price for equitable justice is uncertainty. Document Citado por Relacionados. 37 The second plaintiff was insistent in his evidence that there was no communication from the first plaintiff alerting him to the likely existence of the mistake; he contends the first plaintiff merely apprised him of a good deal and sent him the weblink to the HP website. 47 Not content with making his own purchases, he woke up his brother and transacted 330 units on his behalf. Certain Internet service providers provide the technology to inform a sender that a message has not been properly routed. He is currently employed as an accountant in an accounting firm, Ernst & Young. The case went before both the High Court and the Court of Appeal. Having said that, this exception must always be prudently invoked and judiciously applied; the exiguous scope of this exception is necessary to give the commercial community confidence that commercial transactions will almost invariably be honoured when all the objective contractual indicia are satisfied. 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. Rajah J.C. in the Singapore High Court in Chwee Kin Keong v. Digilandmall.com Pte. 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.)]. If an offeree understands an offer in accordance with its natural meaning and accepts it, the offeror cannot be heard to say that he intended the words of his offer to have a different meaning. In such cases, it would be unconscionable to enforce the bargain and equity will set aside the contract, 26 I respectfully agree with the reasoning of ShawJ in. As a lawyer, he appears to have been indispensable in the plaintiffs attempts to hold the defendant to the bargain. Before dealing with the point of real substance, it is appropriate to briefly deal with two of the less meritorious contentions advanced. From time to time they communicate with each other via the Internet and the short messaging system (sms). One is hard put to imagine that anyone would purchase such an item, let alone place very substantial orders, without making some very basic enquiries as to pricing. 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. He then carried out some checks on the Yahoo search engine to ascertain whether the printer model existed and whether the laser printer could be sold at more than $66. The unusual product description of 55 which the fourth plaintiff alone reluctantly acknowledged as weird and unusual would have been a red light signal that an error had occurred. He was aware that the laser printers were targeted for business use. 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. This is an inane argument. In submissions, his counsel attempted to play down the significance of both this conversation as well as the mass e-mail. After placing his second order, he admitted making further searches on the Internet to fortify my view that the price of the $66 per printer was not a mistake He was also the only plaintiff who placed an order on the Digilandmall website. CHWEE KIN KEONG and Others v DIGILANDMALL.COM Pte Ltd (2004) 2 SLR 594. CHWEE KIN KEONG v DIGILANDMALL.COM Pte Ltd (2005) SGCA 2. Cases of fraud and misrepresentation, and undue influence, are all catered for under other existing and uncontentious equitable rules. In New Zealand, the legislature enacted the Contractual Mistake Act 1977. As this is a critical issue, it is imperative that each of their positions be carefully evaluated. 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. In any event, it does not appear that she disclosed the whole truth of what she knew. [emphasis added]. It appears that he was also in touch with the fifth plaintiff as evidenced by an e-mail sent later that morning by the fifth plaintiff to both him and the second plaintiff containing research, 52 He then called the second plaintiff on his handphone and informed him that he intended to purchase 50 laser printers. He is also part of the Bel-Air network. 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. It appears that it wanted to leave no stone unturned and had therefore mounted a root and branch attack on the plaintiffs claims. 33 After his first order, the second plaintiff contacted the fourth and fifth plaintiffs informing them about the laser printers. Inflexible and mechanical rules lead to injustice. 131 In a number of cases, including the present, it may not really matter which view is preferred. There cannot be any legitimate expectation of enforcement on the part of the non-mistaken party seeking to take advantage of appearances. In the eyes of Singapore law, purported contracts entered into in similar circumstances are void ab initio. VKR a j a hJ C. 27-30 January; 2-6, 9 February; 13 March; 12 April 2004. He classifies mistake in the following manner at 386: If attention is fixed merely on the factual situations, there are three possible types of mistake: common, mutual and unilateral. The issue in this case was whether the pricing was a mistake and if the contract would be fulfilled. 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. Mistakes that negative consent do not inexorably result in contracts being declared void. 124 A number of decisions over the last five decades emanating from several common law jurisdictions even go so far as to suggest that with the integration of the courts of common law and equity, equitable principles now hold sway and that earlier common law decisions need reinterpretation. 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. What amounts to snapping up is a question of degree that will incorporate a spectrum of contextual factors: what is objectively and subjectively known, the magnitude of the transaction(s), the circumstances in which the orders are placed and whether any unusual factors are apparent. 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. The defendant is therefore entitled to recover in full its taxed costs from the plaintiffs. 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. This can be before or during the trial, or after judgment or on appeal. This thread helps to rationalise the development of the common law but ought not to be viewed as supporting the existence of a general test of commercial morality tantamount to the test of unconscionability invoked by equity. The plaintiffs orders were processed by the defendants automated system and confirmation notes were automatically despatched to the plaintiffs within a few minutes. There were no such discussions with potential buyers. A prospective purchaser is entitled to rely on the terms of the web advertisement. In short, where does the justice reside? Chwee Kin Keong vs Digilandmall.com If the defendant were right, they maintain, uncertainty would prevail in the commercial world and more particularly in Internet transactions. In Great Peace Shipping Ltd v Tsavliris Salvage (International) Ltd, the English Court of Appeal decided that Solle v Butcher was wrong to hold that there was an equitable doctrine of common mistakes. 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.