Chapter 16: Unilateral Mistake

Question 1

policy problems with unilateral mistake arguments

Answer 1

it allows a court to worry more about what one of the parties says was their intention at the time of contract
* Turns into intention of one party rather than “intention of the parties”

Yet the tension on the other side is that the courts don’t want to force what is clearly a bad deal down the throat of one party
* Especially when it’s clearly established that there is a substantial injustice to one party and/or a substantial windfall to the other

Question 2

Stambovsky v Ackley

buyer of haunted house wants to back out

Answer 2

General rule of contract is caveat emptor, buyer beware.
* Generally, if you don’t ask for confirmation of your assumptions or of certain facts – it’s on YOU if you turn out to be wrong.

Exception to Caveat Emptor: a condition which has been created by the seller materially impairs the value of the contract and is:
* peculiarly within the knowledge of the seller, or
* Unlikely to be discovered by a prudent purchaser exercising due care

Equitable remedy of rescission applied

Question 3

Smith v Hughes

New vs Old Oats case

Answer 3

If A thought the terms of the contract were X, and in fact they were Y, there is no contract (no meeting of the minds)

When one party causes the mistake as to terms, it is a breach, this is not a mistake which will entitle the party at fault to undo what would otherwise be a contract

If one knows that the other party is mistaken as to terms of the contract, then the contract is void
* This doesn’t apply if the mistaken party induces the contract, but makes a mistake as to terms

Question 4

Hartog v Colin & Shields

Answer 4

If one knows that the other party is mistaken as to the terms of the contract, then the contract is void

can’t “snap up offer” when it is obvious that a mistake has been made

Question 5

Imperial Glass v Consolidated Supplies

Answer 5

Initial tender not an offer to sell, bid acceptance is offer, confirmation of bid is acceptance
Mistake isn’t relevant if:
There wasn’t fraud on the part of the non-mistaken party
There was negligence on the part of the mistaken party

pre contract a contract b framework, not binding precedent today in construction contracts

Question 6

Ron Engineering v Ontario

Answer 6

Contract A (bidding contract) v Contract B (final contract) Framework:
1. Contract A is a unilateral contract (this is wrong and later corrected), placing obligations on the tenderer
2. If there is a mistake in calculator of the bid made at the contract A stage, this is not a legally relevant mistake unless the error would be obvious on the face of the tender