> But in most of modern life, the computer is the main thing, and it is somewhat eccentric to suggest that the computer is wrong. What, the piece of paper that I skimmed and signed and stuck in a drawer is the deal, and not the computer screen that I look at every day? Seems implausible. The contract is just a piece of paper; the computer is real life.
What in the world is the author talking about here? Why wouldn't the contract you signed be the contract? And the administrative error is an error in execution of the contract, so of course there's some space for dispute. Without that contract, he wouldn't have shares in the first place.
> If you give your CEO options that expire in August 2024, and you put into the computer that they expire in October 2024, then they expire in October 2024. How was he supposed to know that they expired in August?
Flipping this around, if the CEO signed a contract saying they expired in December then the system said they expired in October, I would still expect the shares to expire in December. By the author's logic, they would expire in October.
They're talking about the world that most people live in, where lawyers are expensive and bureaucracies are run by computers and people looking at computers. They're saying that 90% of the time, the computer is correct, and people will look at you strangely if you say that "No, my contract with the insurance company says that it has to cover this medication, so your pharmacy has to fill it, regardless of what the insurance's computer system says". Everyone knows that the insurance's computer system has a bug, everybody knows that the medication they're trying to give me should be covered, but nobody is able to fix it.
Levine is having a bit of fun. Contracts are an agreement between two parties; in other Money Stuffs he's talked about how the written contract is also secondary to the agreement as understood by both parties. The paperwork makes it easier to enforce in court, but you can (even in 2025) still have enforceable contracts with just a handshake.
It’s not the author’s logic. It’s the court’s logic.
Contracts are messy in the real world. Sorting it out can be tricky. The various doctrines of estoppel are relevant for sorting things out.
Of particular pertinence to this case, “conventional estoppel” means that if both parties consistently behave in a certain way that can become an expectation to be relied upon (over-simplified!)
In this case, if the guy reasonable relied on the convention that he would be notified when they expired, and wasn’t, then he may have an estoppel claim.
There is a large framework around contract law that takes a semester in law school just for the introduction.
> By the author's logic, they would expire in October.
That's... not the logic stated in the article. In both cases you get the expiration date in the contract.†
If you make a false representation to someone, and they rely on that, which is exactly what happened here, you can be liable for the damage to them, which is also exactly what happened here.
If you make a false representation to someone, and nothing bad happens, and they find proof that you made a mistake, then... you adjust what you're saying, and there are no other consequences.
† Kummeth contended that, had he been aware of the options' actual expiration date, he would have exercised them, and this was obviously true. He was awarded an amount based on their value around the time of expiration specified in the contract, not their value at the time he tried to exercise them.
IMO, Matt does a pretty bad job of illustrating that point. It seems like he is construing this ruling as a an example of the computer superseding the contract.
>What, the piece of paper that I skimmed and signed and stuck in a drawer is the deal, and not the computer screen that I look at every day? Seems implausible. The contract is just a piece of paper; the computer is real life.
>The stock administration platform is real life; the contract is just a contract.
Maybe there are 2 levels are sarcasm and he is actually saying the paper contract drives the ruling (which it did), but I dont see it.
> IMO, Matt does a pretty bad job of illustrating that point. It seems like he is construing this ruling as a an example of the computer superseding the contract.
Thank you. That is exactly the point I was trying to make. It wasn't the computer. It was execution of the contract and which side of the contract performed poorly in that execution. It's not as reductive as that's what the computer said.
I had the same takeaway. The court didnt say the September sale price represented in the computer must be honored. It rolled the sale back based on the august date in the contract.
This is the court essentially saying "you both errored in executing the contract as written" and then trying to figure out what would have happened in the hypothetical where each executed it faithfully. Looking at the ticker, and august average sale price was lower than the September transaction date.
What in the world is the author talking about here? Why wouldn't the contract you signed be the contract? And the administrative error is an error in execution of the contract, so of course there's some space for dispute. Without that contract, he wouldn't have shares in the first place.
> If you give your CEO options that expire in August 2024, and you put into the computer that they expire in October 2024, then they expire in October 2024. How was he supposed to know that they expired in August?
Flipping this around, if the CEO signed a contract saying they expired in December then the system said they expired in October, I would still expect the shares to expire in December. By the author's logic, they would expire in October.