Legal Case Brief
Chwee Kin Keong and Others v Digilandmall.com Pte Ltd [2005] SGCA 2; [2005] 1 SLR(R) 502
Contract – unilateral mistake – Internet Contract – Consensus ad Idem – Meeting of the Minds – Acceptance – Offer – Void – Error
Facts
The defendant, Digilandmall.com Pte Ltd, was an online IT company that sold related software and hardware from Singapore. They were selling an HP laser printer and an employee of a related company accidentally changed its price on three websites operated by the defendant and the related company. It was listed at S$66 instead of S$3,854 on both the defendant’s own website and the HP website it operated. This was not noticed by the company until over 4,000 printers were ordered. The claimants had ordered at least 100 printers each at this price. When the defendant discovered this mistake on their website, they sent an email to the claimants to say they would not be fulfilling this order.
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Issues
The claimants argued that they were not aware that this price was a mistake and wanted the binding contract to be fulfilled. The defendant argued this pricing was a unilateral mistake and that the claimants took advantage of this. The Court of Appeal considered whether actual knowledge of a fundamental pricing mistake was required to make the contracts void at common law, and whether equity could grant relief where there was only constructive knowledge.
Decision/Outcome
The Court of Appeal upheld the finding that the contracts were void. The pricing mistake concerned a fundamental term, and the court upheld the findings of actual knowledge on the purchasers’ part. Actual knowledge, including wilful blindness, was required at common law; merely showing that a purchaser ought to have known of the mistake was insufficient. Knowledge could be inferred from all the surrounding circumstances. On that basis, there was no consensus ad idem or meeting of the minds.
The court also recognised a separate equitable jurisdiction to set aside a contract for unilateral mistake. Constructive knowledge alone was insufficient: there also had to be impropriety, such as sharp practice or unconscionable conduct. It gave alternative equitable grounds for rejecting the second and fourth appellants’ claims.
The challenge to the amendments to the defence failed. The appeal was dismissed except as to trial costs: the claimants’ liability was reduced to two-thirds of the taxed costs because the defendant had failed on substantial other defences. The claimants were ordered to pay 90% of the appeal costs.
