Law of Error (L10) Flashcards
How did McBryde define error?
“A discrepancy between reality and a party’s belief”.
How did Stair describe the history of error?
Wide scope.
“Those who err in the substantials of what is done, contract not” (Stair 1.10.3).
Difficulties of proof.
“But the exception upon error is seldom relevant, because it depends upon the knowledge of the person erring, which he can hardly prove” (Stair IV. I I. 24).
What are the 3 types of error?
Error in expression.
- Anderson v Lambie 1954.
- Rectification.
- Law Reform (Misc Provs) (Scot) Act 1995 ss8-9.
Performance error.
- Unjustified enrichment.
- Mistaken payments, payment to wrong person etc.
Consensual error.
- Relates to consent.
What is s11 of Bell’s Principles?
Error in the substantials - in substantia - sometimes called essential error.
What are the 5 categories of essential error?
Subject of the contract.
Identity of the debtor.
Price.
Quality of thing bargained for.
Nature of the contract.
What did Stewart v Kennedy 1890 tell us about essential error?
Was court to ratify price or fix price?
Objective approach.
“… in the case of onerous contracts reduce to writing the erroneous belief of one of the contracting parties in regard to the nature of the obligations … will not be sufficient to give him the right [to rescind].
Error redefined.
“Unless such a belief has been induced by the representations, fraudulent or not, of the other party to the contract.”
What did Menzies v Menzies (1893) 20 R (HL) 108 tell us about essential error?
“Error becomes essential whenever it is shown that but for it one of the parties would have declined to contract. He cannot rescind unless his error was induced by the representations of the other contracting party…”
Error becoming misrepresentation.
Error must be induced.
What are the 3 types of consensual error?
Common error.
Mutual error - dissensus.
Unilateral error.
What is common error?
Parties mistaken about the same thing.
- Hamilton v Western Bank (1861).
What is mutual error?
Offer and acceptance do not coincide e.g. Mathieson Gee v Quigley (mouldy pond case).
Parties at cross purposes.
- Raffles v Wichelhaus (1864).
What is induced unilateral error?
Error = misrepresentation.
Leads to voidable contract etc.
What if it’s induced + ‘essential’?
- Little modern authority.
- Cf Morrison v Robertson - error as to identity.
- Shogun Finance Ltd v Hudson [2004] 1 AC 919 (M & T 4.41).
- Suggestion that contract may be void (McBryde).
What is uninduced unilateral error?
For UUE to be operative it must be “error+” (McBryde).
Error plus what?
Gratuitous contracts treated differently.
- Presumption against donation.
- Hunter v Bradford Property Trust Ltd 1970.
- Error as to legal effect of second contract they signed. Gratuitous.
- Simply to alter the terms of the first contract.
Error plus onerous contract?
- Conflicting authorities.
Steuart’s Trustees v Hart (1875) - “The purchaser is not fairly entitled to take advantage of such an error”.
- Relevant factors: Knowledge. Non-disclosure. Bad faith.
- Stewart v Kennedy (1890) - Error must be induced.
- Followed in:
- Steel v Bradley Homes Ltd 1972.
- Royal Bank of Scot v Purvis 1990.
- Spook Erection (Northern) Ltd v Kaye 1990.
Angus v Bryden 1992.
- Back to Steuart’s Trs.
- A narrow exception.
- Conditions: Error of expression. Essential. Error known & taken advantage of by other party.
- If fulfilled: Error “is a wrong for which the law provides a remedy”.
Wills v Strategic Procurement (UK) Ltd 2013.
- Steuart’s is still good law.
- Allowed a proof.
- “Assuming that Steuart’s Trustees is good law, it is not every error which, even if approached by the other party, will justify a challenge to a contract… The difficulty is in identifying on which side of the line any particular case falls.”
What was said in Keong v Digilandmall.com Pte Ltd [2006] 1 LRC 37?
Para 34.
“While we agree that being opportunistic and profit-seeking does not necessarily suggest knowledge, such motives are nevertheless factors which a court is entitled to take into account, together with other circumstances, in determining whether there was, in fact, knowledge of the mistake or that the appellants had reasons to suspect there could be a mistake.
Para 37-44.
“Knowledge … has to be inferred from all the surrounding circumstances.”
Relevant factors were: Sharp practice. Knowledge. Taking advantage.
