1.3 Vitiating Factors (Mistake) Flashcards
What is ‘mistake’ as a vitiating factor in contract law and explain the three types of mistakes?
Mistake occurs when a party is mistaken about a fundamental underlying fact of the contract.
The three types of mistakes are common mistake, mutual mistake, and unilateral mistake.
What is a common mistake in contract law?
Common mistake occurs when both parties make the same mistake.
Common mistake is divided into three categories:
- mistake as to the existence of the subject matter
- mistake as to the title, and
- mistake as to the quality of the subject matter.
What is a mutual mistake in contract law?
In mutual or cross-purpose mistake, both parties are mistaken, but they may be mistaken about different things. To try to establish what the contract should have been, the courts will take an objective view.
If the contract can be understood, then it could be enforced and damages awarded; however, if the contract is too ambiguous, then there is no contract.
What is a unilateral mistake in contract law?
Unilateral mistake is found in two different situations where one party is mistaken.
The first is mistake as to terms. Generally, a contract will be void because applying an objective test to the agreement will show that it would be impossible to contract on the basis which one party is claiming.
The second is a mistake as to identity. In this case, only one party is mistaken, and the other
party knows of this mistake.
What can be done for a mistake regarding a document?
If there is a mistake made regarding a document, then it is possible for the parties to have a
document rectified so they can agree the correct term of the contract. The court could then
order specific performance of the rectified contract.
What is the meaning of ‘non est factum’?
Not my deed.
The situation may arise where an individual signs a document which is fundamentally different from what they believe they are claiming. This is known as “non est factum”, meaning “this is not my deed”.
The burden of proof is on the party who is trying to rely on the claim of non est factum. There are two things they must establish.
First, there must be a radical or fundamental difference between the document signed and what they believe they were signing; and second, they must not have been careless in signing the document.
