Hartog v Colin & Shields [1939] is the seminal authority for the “snapping up” doctrine, which prevents an offeree from enforcing an agreement when they possess actual knowledge of a material mistake in the offer. It establishes a critical negative limit on the objective theory of contract, precluding a party from relying on an outward manifestation of intent that they know contradicts the offeror’s true subjective intent.

Facts of the Case

The defendants offered to sell the plaintiff 30,000 Argentine hare skins. Due to a clerical error, the offer was expressed at a price “per pound” rather than the intended “per piece”. In this specific trade, hare skins were traditionally sold by the piece, and all prior verbal and written negotiations between these parties had been conducted on a per-piece basis.

Because a pound contained approximately three skins, the mistaken “per pound” price resulted in a value roughly one-third of what had been previously discussed — roughly 3¾d per piece compared to a previous quote of 10¾d. The plaintiff immediately accepted the offer and later sued for damages when the defendants discovered the error and refused to deliver the skins at the mistaken price.

Legal Issues

The court had to determine whether a binding contract existed based on the objective appearance of the offer and acceptance. The central issue was whether a party can enforce a contract if they actually knew that the other party’s offer contained a material mistake and intended to “snap up” an unintended bargain.

Judgement

The court ruled in favour of the defendants, finding that no contract had been concluded. Singleton J was satisfied that the plaintiff “must have realised, and did in fact know” that a mistake had occurred, given the “stark difference” from previous negotiations and established trade custom. The court held that:

  • The offer was wrongly expressed and did not represent the offerors’ real intention.
  • The plaintiff could not have reasonably supposed the offer expressed the defendants’ true intent.
  • Consequently, the plaintiff was not entitled to take advantage of a document he knew contained a material error.

Authority and Significance

  • The “snapping up” rule: this case establishes that the objective test of agreement is displaced when the non-mistaken party has actual knowledge of the error.
  • Subjective intent: while English law is predominantly objective, Hartog demonstrates that subjective knowledge plays a “negative role” by depriving a party of the right to enforce an agreement based on a known error.
  • Actual vs. constructive knowledge: modern interpretations, such as in Longley v PPB Entertainment Ltd, suggest Hartog requires actual knowledge of the mistake rather than just “constructive knowledge”.
  • Comparison to Smith v Hughes: unlike Smith v Hughes (where the seller remained passive about the buyer’s mistake regarding the quality of the oats), Hartog involves a mistake regarding the actual terms of the offer, which the other party actively sought to exploit.