Law of Contract Mistake cases

7(1)

In every action respect of injury in death such damages may be awarded from death to the persons respectively for whom and whose the benefit the action is brought

United Scientific Holdings Ltd v Burnley Borough Council

HoL of the opinion that Common Law and equity should no longer be regarded as distinct systems, thus there need not be a distinction between mistake and common la and mistake, once there is the ability to save a contract let the courts intervene

ab initio

from the beginning

Consensus ad idem

meeting of the minds/ both parties have the same idea of what is taking place in the contract

Amalgamated Investment and Property Company Ltd v John Walker & Sons

Planning permission needed/ Ps asked Ds whether property was designated as a building of special architectural or historical interest/ Ds replied no and at the date this was both truthful and accurate/ a day later the DOE listed the building as one of such with legal effect/ contract COULD NOT BE RISCNENDED for common mistake as the mistake was not operative at the time of signing

Smith v Hughes

Oats delivered D refused to pay for them on the grounds that they were new oats and he wanted old oats as he was a race horse trainer/ P denied having knowledge that racehorse trainers needed old oats/ the D would have won if he had contracted the plaintiff to sell him old oats and had received new oats/ in order to relieve the defendant, it was necessary that the jury should find not that the d believed that the P was contracting to sell him old oats

Blackburn J on the principle of mistake

"I apprehend that, if one of the parties intends to make a contract on one set of terms and the other intends to make a contract on another set of terms, or parties are not ad idem, there is no contract, unless the circumstances as such as to preclude (prevent) one of the parties from denying that he has agreed to the terms

Leaf v International Galleries

Oil painting said to be painted by a famous English painter/ five years later, it was transpired that it was not and worth less/ buyer sought to rescind the contract/ contract was said to relate to the painting and not to who had painted it/ a bad bargain is not enough to void a contract

Belle v Lever Bros

chairman of company made redundant and remaining part of his service contract paid off/ discovered chairman was guilty of offences that would have permitted them to dismiss him without compensation / common mistake pleaded but was UNSUCCESSFUL as there was only mistake as to the quality of the subject matter/ which is not enough to render the contract void/ this is the position at common law about the fundamental nature rule

Res Extincta

the item is destroyed/ this is common mistake of a fundamental nature as the subject matter of the contract is no longer in existence

Res Sua

One's own thing/ One's own property/ this a common mistake of a fundamental nature as one of the parties already owns the thing they are contracting to recieve

Couturier v Hastie

contract made for the sale of corn/ unknown to both parties the corn had already been sold/ common mistake/ contract held to be void on the principal of res extincta as it no longer existed

Cooper v Phibbs

plaintiff agreed to purchase a lease for a fishery he already owned/ common mistake/ contract held to be void on the doctrine of res sua

Solle v Butcher

war time flat / common mistake in equity/ flat repaired after being bombed in the war and both D and P agreed that it would be a new price, however statute at the time kept it linked to it's pre-war amount/ both parties agreed to 250 rent but later had a falling out where the tenant brought and action to have the rent reduced according to what was outlined in statute and to recover payments made/ it was held that the lease would be set aide with various terms as to the amount the tenant would pay in respect to his occupation of the flat/ contract was not void at common law but could be set aside in equity however to set it aside would have been inequitable since it would have required his immediate dispossession

What does Lord Denning say about mistake in Solle v Butcher

Mistake is of 2 kinds/ 1) mistake which renders the contract void ab initio usually dealt with at common law 2) mistake which renders the contract voidable and liable to be set aside on certain terms which is dealt with by the courts at equity/ May be considered problematic as it brings the law out of line with what was said in Belle v Lever Bros

Great Peace Shipping Ltd v Tsavliris Salvage

Court took the view that the approach in Solle v Butcher could not be reconciled with Belle v Lever Bros and that there was no justification for allowing a broader doctrine for common mistake in equity than what existed at common law/ it was held that equity OUGHT NOT to provide relief from mistakes where the common law does not provide it

Associated Japanese Bank Int'l v Credit du Nord

Court confirms that for a mistake to be operative at common law, it must render the subject matter essentially and radically different from the subject matter which the parties believed to exist / if the common law says it is void then that is that but if the contract is valid equity can step in

The effect of common mistake at common law

common mistake has no effect at common law unless it eliminates the subject matter of the agreement

Instances where a contract can be set aside for the unilateral mistake of mistaken identity

1) inter absentes (between those absent) the person believed they were dealing with someone different / 2) the other party was aware of the mistake 3) Inter praesentes (face to face) at the time of making the contract the identity of the other person was of crucial importance to the person filing for unilateral mistake

Cundy v Lindsay

Handkerchiefs/ Plaintiff mistakenly thought he was dealing with a respectable firm who lived at the same address as D / they were con men/ held that the contract was void based on mistake

King's Norton Metal Co Ltd. v Edridge, Merret and Co

inter absentes / a fraud ordered goods from a metal manufacturer under the guise that he was a well known businessman with multiple factories and agents/ one party thought they were dealing with someone different/ held that the contract was voided due to unilateral mistake

Boulton v Jones

unilateral mistake where the other party is aware/ one party entered into a contract with the other for goods without being informed that the head of the business had changed/ when J found out he sued B for the price/ it was held J was not liable to pay for the goods/ if a person intends to contract with A then B cannot give himself any rights under it

Phillips v Brooks

inter praesentes/ the courts believer just wanted the ring sold, therefore identity was not of crucial importance

Unilateral Mistake at Equity

if one party to the knowledge of the other is mistaken to the fundamental character of the offer and it can be shown that he did not intend to make the apparent contract, the contract is void/ equity will either rescind the contract or refuse a decree of specific performance

Mistake concerning documents

documents are usually binding on both parties once they are signed in writing aside from two exceptions / 1) Non Est Factum - It is not the deed/ 2) Rectification- usually the correction of minor discrepancies for common mistake

Foster v Mackinnon

elderly man told the document he was signing was a guarantee when it was an agreement to give money to a con artist/ court allowed the plea of non est factum - it is not the deed

Saunders v Anglia Building Society

widow signed a document without reading because her glasses were broken/ was told it was a deed of gift to her nephew but it was actually a deed of gift to Lee who mortgaged the building to the Anglia Buiding Society/ action of non est factum failed as the courts thought she was carless in not waiting till her glasses were mended and that the document she signed was not fundamentally different from the one she thought she signed

Joscelyne v Nissen

rectification/ father and daughter formed an oral agreement which was then after put into a written contract with some terms missing / father was allowed to have it rectified to reflect actual terms agreed upon

Requirements for Rectification

1) clear evidence that owing to common mistake the contract does not accurately represent the agreement of the parties at the time of execution 2) the intention of the parties must have continued unaltered until the time of the execution of the written agreement

Mutual Mistake at equity

Courts look at the sense of promise and determine what was beinf achieved/ if they cannot determine the contract would be voided