Chwee Kin Keong v Digilandmall: Unilateral Mistake in Online Contracts

In Chwee Kin Keong and Others v Digilandmall.com Pte Ltd, the Singapore Court of Appeal addressed whether contracts formed through online purchase orders for Hewlett Packard laser printers were void due to unilateral mistake. Digilandmall.com, the respondent, mistakenly listed the printers at $66 instead of $3,854 on its website. The appellants placed large orders, knowing the price was likely an error. The Court of Appeal held that the contracts were void due to unilateral mistake, as the appellants were aware of the pricing error. The court dismissed the appeal, except for a modification regarding the allocation of trial costs.

1. Case Overview

1.1 Court

Court of Appeal

1.2 Outcome

Appeal dismissed, except in relation to the order on costs of the trial.

1.3 Case Type

Civil

1.4 Judgment Type

Written Judgment

1.5 Jurisdiction

Singapore

1.6 Description

Singapore Court of Appeal: Contracts for printers sold at a mistaken price online were void due to unilateral mistake. The buyers were aware of the error.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Chwee Kin KeongAppellantIndividualAppeal Dismissed in PartPartial
Digilandmall.com Pte LtdRespondentCorporationJudgment for RespondentWon

3. Judges

Judge NameTitleDelivered Judgment
Chao Hick TinJustice of AppealYes
Kan Ting ChiuJudgeNo
Yong Pung HowChief JusticeNo

4. Counsels

Counsel NameOrganization
Malcolm TanTan SL and Partners
Philip FongHarry Elias Partnership
Doris ChiaHarry Elias Partnership
Navin LoboHarry Elias Partnership

4. Facts

  1. Digilandmall.com mistakenly listed Hewlett Packard printers for sale at $66 instead of $3,854.
  2. The appellants placed orders for a large number of printers after learning about the unusually low price.
  3. The first appellant was informed of the low price at 1.17am on 13 January 2003 and he, in turn, advised the second and third appellants about it.
  4. The appellants were aware that the normal price for such printers was around US$2,000 to US$4,000.
  5. The respondent discovered the error at 9.15am on 13 January 2003 and took steps to remove the printer from the websites.
  6. The respondent informed the purchasers on 14 January 2003 that it would not honor the orders.
  7. The appellants then took the matter to the media.

5. Formal Citations

  1. Chwee Kin Keong and Others v Digilandmall.com Pte Ltd, CA 30/2004, [2005] SGCA 2

6. Timeline

DateEvent
Price for printer accidentally altered to $66 on websites.
Appellants placed orders for printers at the mistaken price.
Error discovered by respondent.
Respondent informed purchasers that it would not honor the orders.
High Court held that purchase orders were void under the common law doctrine of unilateral mistake.
Judgment reserved.
Court of Appeal dismissed the appeal, except in relation to the order on costs of the trial.

7. Legal Issues

  1. Unilateral Mistake
    • Outcome: The court held that the contracts were void due to unilateral mistake because the appellants knew or ought to have known about the pricing error.
    • Category: Substantive
    • Sub-Issues:
      • Knowledge of mistake
      • Constructive knowledge
      • Fundamental term
    • Related Cases:
      • [2004] 2 SLR 594
      • LR 6 QB 597
      • [2004] 1 AC 919
      • [1939] 3 All ER 566
  2. Costs
    • Outcome: The court modified the order on costs, ruling that the appellants should bear two-thirds of the trial costs.
    • Category: Procedural
    • Sub-Issues:
      • Allocation of costs
      • Discretion of court
  3. Amendment of Pleadings
    • Outcome: The court upheld the trial judge's decision to allow the respondent to amend its pleadings.
    • Category: Procedural
    • Sub-Issues:
      • Timing of amendment
      • Prejudice to opposing party

8. Remedies Sought

  1. Specific Performance
  2. Enforcement of Contracts

9. Cause of Actions

  • Breach of Contract

10. Practice Areas

  • Commercial Litigation
  • E-commerce Law

11. Industries

  • Information Technology
  • Retail

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Digilandmall.com Pte LtdHigh CourtYes[2004] 2 SLR 594SingaporeThe High Court decision that the contracts were void for unilateral mistake was upheld on appeal.
Great Peace Shipping Ltd v Tsavliris Salvage (International) LtdEnglish Court of AppealYes[2003] QB 679England and WalesDiscussed in relation to the existence of an equitable jurisdiction to rescind agreements for unilateral mistakes; the court distinguished its facts.
Smith v HughesQueen's BenchYesLR 6 QB 597England and WalesCited for the principle that a promisor is not bound to fulfill a promise in a sense the promisee knew the promisor did not intend.
Shogun Finance Ltd v HudsonHouse of LordsYes[2004] 1 AC 919England and WalesCited for the principle that a party aware of the other's error cannot claim consensus ad idem.
Hartog v Colin & ShieldsNot AvailableYes[1939] 3 All ER 566England and WalesCited as a locus classicus on unilateral mistake, where the plaintiff knew of the defendant's mistake in offering hare skins at a price per pound instead of per piece.
McMaster University v Wilchar Construction LtdNot AvailableYes(1971) 22 DLR (3d) 9CanadaApplied Hartog v Colin & Shields, finding the plaintiff knew the defendant omitted a wage escalator clause in its tender.
OT Africa Line Ltd v Vickers PlcNot AvailableYes[1996] 1 Lloyd’s Rep 700England and WalesDiscussed in relation to the circumstances under which a party should make inquiry when there is a real reason to suppose the existence of a mistake.
Ho Seng Lee Construction Pte Ltd v Nian Chuan Construction Pte LtdNot AvailableYes[2001] 4 SLR 407SingaporeDiscussed in relation to whether constructive knowledge by a non-mistaken party of the mistake would suffice to vitiate the contract ab initio.
Bell v Lever Brothers, LimitedHouse of LordsYes[1932] AC 161England and WalesDiscussed in relation to the nature of mistake that would render a contract void.
First City Capital Ltd v British Columbia Building CorpSupreme Court of British ColumbiaYes(1989) 43 BLR 29CanadaDiscussed in relation to the court's power to relieve against the consequences of mistake.
Craig Estate v HigginsNot AvailableYes(1993) 86 BCLR (2d) 64CanadaDiscussed in relation to the court's power to grant relief from a contract entered into on the basis of unilateral mistake.
256593 BC Ltd v 456795 BC LtdBritish Columbia Court of AppealYes(1999) 171 DLR (4th) 470CanadaDiscussed in relation to the equitable jurisdiction of the courts to relieve against mistake in contract.
Associated Japanese Bank (International) Ltd v Crédit du Nord SANot AvailableYes[1989] 1 WLR 255England and WalesDiscussed in relation to the equitable jurisdiction to set aside a contract even though it did not meet the strict criteria necessary in common law to establish that it was void for common mistake.
Solle v ButcherCourt of AppealYes[1950] 1 KB 671England and WalesDiscussed in relation to the equitable jurisdiction in the courts to grant relief where there is a bona fide unilateral mistake on the part of one party which does not come within the common law doctrine of unilateral mistake.
Grist v BaileyNot AvailableYes[1967] Ch 532England and WalesCited as a case where the courts had in several cases held that there was an equitable jurisdiction to set aside a contract even though it did not meet the strict criteria necessary in common law to establish that it was void for common mistake.
Magee v Pennine Insurance Co LtdNot AvailableYes[1969] 2 QB 507England and WalesCited as a case where the courts had in several cases held that there was an equitable jurisdiction to set aside a contract even though it did not meet the strict criteria necessary in common law to establish that it was void for common mistake.
Laurence v Lexcourt Holdings LtdNot AvailableYes[1978] 1 WLR 1128England and WalesCited as a case where the courts had in several cases held that there was an equitable jurisdiction to set aside a contract even though it did not meet the strict criteria necessary in common law to establish that it was void for common mistake.
Cooper v PhibbsHouse of LordsYes(1867) LR 2 HL 149England and WalesCited as a case where the courts have exercised equitable jurisdiction to set aside a contract made under a common mistake.
Riverlate Properties Ltd v PaulEnglish Court of AppealYes[1975] Ch 133England and WalesInstructed as it illustrated the circumstances under which the court should exercise its equitable jurisdiction.
Redbridge London Borough Council v Robinson Rentals LtdHigh CourtYes(1969) 211 EG 1125England and WalesCited as a case where it was clearly held that mere unilateral mistake on the part of the plaintiff, unknown to the defendant, was no ground for rescission of the lease in question.
Taylor v JohnsonAustralian High CourtYes(1983) 151 CLR 422AustraliaCited as a case where the vendor by a written contract agreed to sell two adjoining pieces of land, each of about five acres, for a total price of $15,000.
Redgrave v HurdNot AvailableYes(1881) 20 Ch D 1England and WalesCited as an example of equity intervening in many aspects of human dealings in the contractual setting.
Huyton SA v Distribuidora Internacional de Productos Agricolas SA de CVEnglish High CourtYes[2003] 2 Lloyd’s Rep 780England and WalesCited as a case where the English High Court decisions had accepted that the equitable remedy of rescission for unilateral mistake still survived Great Peace Shipping.
Harrison v Halliwell LandauEnglish High CourtYes[2004] EWHC 1316England and WalesCited as a case where the English High Court decisions had accepted that the equitable remedy of rescission for unilateral mistake still survived Great Peace Shipping.
William Sindall Plc v Cambridgeshire County CouncilNot AvailableYes[1994] 1 WLR 1016England and WalesCited as a case where one suggested way to differentiate the application of the common law rule and equity would be to hold that the former is limited to mistakes with regard to the subject matter of the contract, while the latter can have regard to a wider and perhaps open-ended category of fundamental mistake.
Can-Dive Services v Pacific Coast Energy CorpNot AvailableYes(2000) 74 BCLR (3d) 30CanadaCited as a case where unconscionability cannot be imputed based on what a reasonable person would have known.
Tutt v DoyleNew South Wales Court of AppealYes(1997) 42 NSWLR 10AustraliaCited as a case where a conscious omission to disabuse a mistaken party is itself sufficient to constitute unconscionable conduct and thus justify the grant of equitable relief.
Wright Norman v Oversea-Chinese Banking Corp LtdNot AvailableYes[1994] 1 SLR 513SingaporeCited as a case where an amendment which would enable the real issues between the parties to be tried should be allowed subject to penalties on costs.
Ketteman v Hansel Properties LtdHouse of LordsYes[1987] AC 189England and WalesCited as a case where to 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.
The English and Scottish Mercantile Investment Company, Limited v BruntonNot AvailableYes[1892] 2 QB 700England and WalesCited as a case where the concept of constructive notice is basically an equitable concept.

13. Applicable Rules

Rule Name
Order 20 r 5(1) of the Rules of Court (Cap 322, R 5, 2004 Rev Ed)
O 59 r 6A of the Rules of Court

14. Applicable Statutes

Statute NameJurisdiction
Rules of Court (Cap 322, R 5, 2004 Rev Ed)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Unilateral mistake
  • Constructive knowledge
  • Consensus ad idem
  • Sharp practice
  • Unconscionable conduct
  • Internet contracts
  • Pricing error
  • Objective principle
  • Equitable jurisdiction
  • Actual knowledge

15.2 Keywords

  • unilateral mistake
  • online contracts
  • pricing error
  • Digilandmall
  • Chwee Kin Keong
  • Singapore
  • contract law
  • internet law

17. Areas of Law

Area NameRelevance Score
Contract Law95
Mistake90
Civil Procedure60
Costs50

16. Subjects

  • Contract Law
  • E-commerce
  • Civil Procedure
  • Equity