Contract Law- Mistake

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Law Flashcards on Contract Law- Mistake, created by Vanja Juvet on 29/04/2018.
Vanja Juvet
Flashcards by Vanja Juvet, updated more than 1 year ago
Vanja Juvet
Created by Vanja Juvet about 6 years ago
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Question Answer
Categories of Mistake Unilateral, Mutual and Common
Unilateral Mistake one party is mistaken and the other is aware of it. The other party that is aware, proceeds with the contract and takes advantage of the party mistaken. Hartog v Colin & Shields; the price was to be stated 'per piece'. buyers knew that seller was mistaken in stating 'per pound' making it cheaper than the price seller intended. Contract was void for mistake.
Unilateral mistake as to identity the rule is that the operative mistake must relate to the identity of the person one is contracting with. Cundy v Lindsay 1878; no contract between C and the Fraudster. Lewis v Avery 1972; contract not void for mistake. (Where a contract is made face to face the contract is considered to be formed with the actual person irrespective of the identity assumed)
Mutual Mistake There is apparent agreement between the parties. BUT the parties are working at cross-purposes on the terms. they are unaware of each other´s assumptions on the terms of the contract. Raffles v Wichelhaus; judgement for the defendants. the mutual mistake was operative. Smith v Hughes: no operative msitake
Common Mistake Both parties are unaware of an essential fact or law at the time of the contract. The mistake is discovered after the parties have entered the contract. Finding a common mistake makes the contract to be void ab initio. The mistake must relate to "unexpected and wholly exceptional situations; (Associated Japanese Bank v Credit du nord)
Remedies for Mistake * Declaration of Void av initio: money and property transferred under the void contract are returned. * No specific performance: equity may refuse to order specific performance of a contract even when it is not void for mistake at common law. Malins v Freeman; No specific performance when the defendant buyer mistook one auction lot for another lot. * Rectification: a court order for rectification enables a contract to reflect the parties´true intention. Robert v Leicestershire county council.
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