Contract 6 - Mistake Flashcards
What is the effect of mistake?
Prevents a contract from taking legal effect - contract void from outset
What are the 3 categories of mistake?
- Common Mistake: both parties suffering from same mistake π³π³
- Mutual Mistake: both parties mistaken but about different things π³/π³
- Unilateral Mistake: 1 party mistaken and other knows π³π
What are the requirements for common mistake?
π³π³
- Must be sufficiently fundamental to affect validity of contract π³
Will not operate where:
- one party is at fault; π
- contract makes provision for this issue π
(quality of goods does not void contract βοΈπ¦ e.g. painting)
What is the test for mutual mistake?
π³/π³
Objective π: What a reasonable 3rd party would believe the agreement to be, based on words and conduct of themselves. Only if a third party would think there was no discernible meaning will mistake apply .
What are the rules regarding unilateral mistake?
π³π
where only one party has made a mistake - e.g. buying 30g of something for Β£1 rather than 30kg for Β£1
What are the rules regarding unilateral mistake of identity?
π³π
- misrepresentation - Where seller intended to deal with person in front of them & thatβs what happened, NOT void for mistake, voidable for misrepresentation π³π
- Mistake - Where seller can show that identity was of vital importance = VOID for mistake π³π₯Έ
Easier to show where not face to face as the mistake is then who they are contracting with rather than a person they are dealing with.
What happens where a fraudulent buyer sells goods onto a 3rd party?
- misrepresentation- Where fraudster has voidable title, & title has not avoided at time of sale, 3rd party acquires good title where bought in good faith so C canβt take goods back π³ππ=π
- mistake = void & ineffective from outset so 3rd party must return goods even if bought in good faithπ³π₯Έπ=π
What is presumed where parties contract face to face?
Seller intended to deal with person in front of them - difficult to rebut