Date: Mon, 19 Dec 2005 18:52:15

From: Adam Kramer

Subject: Snapping at an Offer

Although not a snapping up case, the better view (an offer or other communication means what it looks like it was intended to mean, not what it means as a matter of its mere words) is fully supported by the HL decision in Mannai Investments Co. Ltd. v Eagle Star Life Assurance Co. Ltd [1997] AC 749. I have no doubt that, barring automated trading problems, the contract would not be upheld in the English courts. The interesting question is the one that follows on from Mannai (a notice rather than a contract case): can the snapper up be held to the contract on the terms it was clear the other party intended to offer- in other words should a buyer who should have known there had been a mistake be forced to take the single share for 610000 yen (assuming there was a single human buyer) - since the offeree's acceptance, taking everything into account, can only reasonably be understood as an acceptance of the only offer that can reasonably appear to have been intended. There are surprisingly few authorities on the matter - those that there are apply the stricter rectification test rather than merely the test of 'what should the offeree have understood the offeror to be offering'.

Adam

-----Original Message-----
From: John Swan
Sent: 19 December 2005 18:31
To: obligations
Subject: RE: ODG: Snapping at an Offer

If the English courts would now really enforce this contract, they must be prepared to refuse to follow Hartog v. Colin & Shields, [1939] 3 All E.R. 566, (K.B.) There the offeree was prevented from accepting an offer that he had to have known was too low by a factor of 3. If an error of 3:1 is enough to prevent a contract, surely one of 610,000:1 is a fortiori one where relief will be given.

Adam Kramer’s comment on automated trading may, of course, change things and I suppose that it is possible that the seller could be held to have waived its right to object in any circumstances, but it would have to be a pretty savagely drafted clause that would compel this result.

There are other Canadian cases on the same lines though some may be of dubious authority in the light of the Supreme Court’s dreadful decision in Ron Engineering & Construction (Eastern) Ltd. v. Ontario (Water Resources Commission), [1981] 1 S.C.R. 111, 119 D.L.R. (3d) 267, 13 B.L.R. 72, 35 N.R. 40, a tendering case. Where tendering is not the issue, the cases that I have referred to are generally accepted without too much difficulty.

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