Date: Mon, 19 Dec 2005 14:01:44 -0500

From: John Swan

Subject: Snapping at an Offer

If we are stuck in “offer and acceptance”, I think that the only possibility is that there is no contract. On the other hand, the Canadian cases, particularly Stepps Investments, suggest that either side can have the contract enforced on the other’s terms. This solution recognizes the problem of the mistake, but permits either side to get from the deal what the other was really prepared to offer and goes some way in balancing the “equities”. In other words, if the seller, to get out the mistake that it made, has to argue that it intended to sell one share for ¥610,000 and not the other way round, the buyer should be able to hold it to that deal.

John

-----Original Message-----
From: Adam Kramer
Sent: December 19, 2005 1:52 PM
Subject: RE: ODG: 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'.

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