If A accidentally offers to sell a laser printer for S$66 instead of the correct price of S$3,854, and B detects the error, it would have entered into a contract with the seller to purchase ten of the items that the seller is not legally bound to, but the contract becomes due to the seller`s unilateral error, that was known to the buyer, Invalid. This reflects the facts and decision of the Singapore Court of Appeal in 2005 in the case of Chwee Kin Keong -v- Digilandmall, which, although not a binding precedent in that jurisdiction, was mentioned with approval and distinction by our High Court in Statoil -v- Louis Dreyfus Energy  EWHC 2257 (Comm). This case concerned a claim for delay beyond the contractual period for the unloading of a ship, which was to be charged at the rate of $40,000 per day (or on a pro rata) agreed upon when the vessel was chartered. As part of the settlement negotiations, the receiving party multiplied the $40,000 by the wrong number of days (a shortfall of about 11). The paying party knew that the receiving party was wrong and decided to remain silent; a settlement amount of $103,000 was agreed. It was considered binding on the grounds that the number of days was not a provision of the settlement agreement. Why these different results? The explanation of the law is that in the first, the amount per article was a contractual clause and that a party erred in this provision by making it known that there was no agreement; in the latter case, the total amount was a duration of the contract (i.e. the settlement amount of $103,000), but the number of days it was calculated was not a term (but it was a fact in which the paying party had made an error); thus, even if one party had been entitled to the other`s error with respect to the multiplier, this did not prevent it from entering into a binding contract. The distinction between the two cases is a good one. For a mutual error to nullify and void the agreement, the fact that the parties are wrong must be essential. For example, if you and I are wrong about the weight of a machine and shipping costs have increased by five percent, that`s probably not a big mistake. But if you and I didn`t know that the purchased machine can`t perform the function for which it was purchased, that`s probably a significant mistake.
With so much time spent signing a contract, business owners need to make sure their efforts won`t be wasted. This is usually the case and if a contract is concluded, both parties are required to abide by the terms of that contract. However, there are cases when both parties agree on a contract under the influence of a common error on an important fact. In some circumstances, this misconception could annite the contract. This principle is known as the doctrine of error. A unilateral error is made by only one of the two contracting parties. The law is well regulated, although its application is not always easy. If one party has made an error with respect to the terms of the contract and that error is known to the other party at the time of performance of the contract, the contract is not binding (or more precisely, that there has never been a contract). This is because the parties have not reached an agreement.
For this to happen, they must be one. In Couturier v. Hastie (1856), a buyer bought a load of corn that both parties believed to be at sea. Unknown to the parties at the time of the conclusion of the contract, the cargo had been disposed of. The cargo could not be purchased because it did not exist both the error and the common intention until the conclusion of the written contract must be proved. Examples where it can be said that there is no contract at all due to a common mistake are situations where one party agrees to sell to the other something like a car or oil paint that they both believe exists but that is unknown to both has been destroyed. .