Date: Mon, 19 Dec 2005 15:49:45

From: Adam Kramer

Subject: Snapping at an Offer

But if the system is automated then can it be said that anyone should have known that there was a mistake? By engaging in trades on an automated system one may be said to deliberately communicating without a safety net, and to accept the full risk of slips of the keyboard. The buyers' agents presumably authorised their computer system to buy at any price below a certain figure. If the trading was not automated then, of course, that is a different matter.

Best,
Adam Kramer

-----Original Message-----
From: John Swan
Sent: 19 December 2005 15:30
Subject: ODG: Snapping at an Offer

Smith v. Hughes does not support an argument that the contract for the purchase and sale of the shares is valid and enforceable. The common law would not let a buyer get away with purchasing shares for a tiny proportion of their value on the basis that the buyer could have had no reasonable expectation that the seller meant to sell at the price it offered.

McMaster University v. Wilchar Construction Ltd. [1971] 3 O.R. 801, 22 D.L.R. (3d) 9; aff'd, (1973), 12 O.R. (2d) 512n, 69 D.L.R. (3d) 400n, and Stepps Investments Ltd. v. Security Capital Corporation (1976), 14 O.R. (2d) 259, 73 D.L.R. (3d) 351, are Canadian examples where one party was not allowed to hold the other to a deal in circumstances where the first party knew that the other had made a mistake. Smith v. Hughes would support this result to the extent that it stands for the argument that one party cannot hold the other to a deal when the first party knows that the other is labouring under a mistake.

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