Error and Misapprehension Cases Flashcards
Wills v Strategic Procurement (UK) Limited
Error.
Lord Malcolm; “The effect of error on the validity of a contract is one of the most uncertain areas in our private law”
W raised a claim in Aberdeen that his solicitor did not inform him of his share option allegedly worth £3.5million. There was an uninduced but known error as the solicitor agreed a settlement which would prevent a claim being able to be raised in London. The verdict applied the precedent of Steuart’s Trustees v Hart.
Steuart’s Trustees v Hart
Error (taking advantage).
The seller sold a piece of land as he thought that the burden of the land charge was too expensive - almost £10, but the buyer knew that the charge was only around 15pence. As H knew that the seller did not know the land charge was lower, H put in a lower offer which was accepted. When ST learned of this, they seeked to have to contract reduced.
Held in favour of ST as although the error was uninduced, H had taken advantage of the error to gain a stronger benefit.
Mathieson Gee v Quigley
Error (subjective v objective).
Subjectively they believed that there had been contract formed for the removal of silt from a pond.
Objectively, the House of Lords decided that there had been no contract formed as there had not been consensus in idem; one thought the silt would be removed but the company only said that they would provide the equipment for it to be removed.
Held - no contract was formed.
Important - historically people would say ‘I was in error’. now needs to be proved objectively.
Morrison v Robertson
Error (dissensus).
M brought an action against R after T who claimed to be the son of W (good reputation), M sold cattle to T who later sold them to R.
Held - M entered in error as he was actually contracting with R.
Shogun Finance v Hudson
Error (dissensus).
R obtained a car on hire purchase from SF from a dealer using a stolen ID (P) and forged P’s signature. R then sold the car to H. SF attempted to get the car back from H.
Held - The identity of the buyer was of significant importance to the contract therefore the contract was held to be void.
Raffles v Wichelhaus
Error (dissensus).
The two parties contracted to transport grain from Bombay to London on the Peerless. There were two ships named Peerless; one sailing in October and one in December. They thought it was for the different times so there was no consensus on the essential terms.
Held - No contract was formed.
Stuart and Co v Kennedy
Error (dissensus).
Two parties contracted for the sale of stone but only agreed it would be a fixed price per foot. The parties thought it was different type of foot measurements which had a dramatic impact on the price (doubled it). Although the parties hadn’t agreed an exact price they had not agreed in the essential elements - the measurements.
Held - No contract was formed.
Stewart v Kennedy
What must the error be in for it to be in the susbstantials?
Lord Watson: Subject matter, Identity, Price, Quality, Nature
Steel’s Trustees v Bradley Homes (Scotland) Ltd
Error (unilateral error)
Solicitors were negotiating to settle a court action. One solicitor accepted an offer but the other failed to notice that the date of interest had changed. He sought to have the contract reduced.
Held - A unilateral and uninduced error in a contract is not a base for a contract to be reduced.
Royal Bank of Scotland v Purvis
Error (unilateral error)
A wife became a guarantor of a loan for a limited company which her and her husband were directors of. The bank phoned her and she claimed that she did not know she was responsible to pay it.
Held - The contract stands as it was her own fault that she did not read and understand the legal implications.
Stewart v Kennedy
Prof. McBryde (University of Edinburgh)
Error (Error Plus)
Lord Watson
Error in the substanials; subject matter, price, quality, nature, identity
Prof. McBryde;
Mutual Error, Error induced by misrepresentation, advantage taken of error, gratuitous contracts.
Angus v Bryden
Error (taking advantage)
A sold fishing rights at the mouth of River Ayr. The contract included the rights for the river and sea although A wanted to maintain the rights for the sea and only sell the river rights. Steuart’s Trustees v Hart was applied.
Hunter v Bradford Property Trust
Error (gratuitous contracts)
Sisters wanted the contract to be struck down under force and fear but were unsuccessful. they were, however, successful when they argued that the second deed was gratuitously done in error.
This usually makes the contract invalid.
Stewart v Kennedy
Error (induced)
The contract stated that it would be ratified by the court. S misunderstood this to mean that the court would decide the price. It was held on the first instance that there was no error as the essential elements of the contract had been established.
On appeal it was held that there was error but it was not induced therefore it was only S’s fault and the contract would remain.
Menzies v Menzies
Lord Watson
Induced error is a basis for reducing a contract but it must be shown that the error was induced by operative misrepresentation.
