01
Factual background & dispute
- B2C2 deployed automated market-making software to place and execute orders on Quoine's trading platform.
- Following a technical platform defect, several trades executed automatically at prices deviating sharply from market rates.
- Quoine unilaterally cancelled and reversed the completed transactions, prompting B2C2 to bring an action for breach of contract.
02
Core issues & judicial focus
- Whether transactions executed entirely by deterministic algorithms constitute valid and binding contracts
- Whose state of mind governs unilateral mistake in automated transactions and at what point in time that state of mind is determined
- Whether a trading platform has the right to reverse completed transactions unilaterally
03
Judicial finding & holding
- The Court of Appeal confirmed that algorithmic trading can form legally binding contracts.
- The doctrine of unilateral mistake focuses on the knowledge and intention of the programmer when writing the underlying algorithm.
- The Court affirmed that Quoine acted in breach of contract by unilaterally reversing the executed trades.
04
Practical risk implications
01Trading platform terms must explicitly define execution finality, off-market price rules, market halts, and reversal powers.
02Software development and parameter records serve as central evidence to establish algorithmic intent and risk foresight.
03Autonomous trading systems should implement hard limits for price deviation, liquidity anomalies, and manual override mechanisms.