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 appellate court upheld the finding that the platform breached its contract.
- For deterministic trading programs, the analysis considers the relevant knowledge of programmers or operators from programming through contract formation, including later knowledge followed by a decision to let the program exploit the mistake.
- The programs were deterministic, not self-learning or generative AI. Agent-related recommendations are comparative governance guidance.
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.