Mistake Flashcards
When can an agreement be void due to mistake
When the mistake is so fundamental it prevented the parties from ever reaching an agreement. Offer and acceptance don’t objectively match
Two types of agreement mistake
Unilateral
Mutual
What is a unilateral mistake
When one party is mistaken and the other party knows
Effect of a unilateral mistake
Void if mistake related to a term but not if it relates to a collateral matter or the quality
What is a mutual mistake
Both parties are mistaken but in different ways
Effect of a mutual mistake
Void if a reasonable person cannot say which interpretation is more reasonable
Effect of a mistake regarding the identify of the contracting party
Void if fundamental (written)
Voidable if fraudulent misrepresentation ( face to face or written)
When is a mistake regarding identify of contracting party fundamental
When two real parties are muddled up. NOt when there is one party with two identities, one of which is fake.
Can a face to face contract be void due to fundamental mistake regarding identify of contracting party
No can only be voidable due to fraudulent misrepresentation because you’re assumed to contract with person physically present
Difference between void and voidable regarding recovery of property sold to innocent third party
If goods have been sold to innocent third party
Void- recoverable
Voidable- not recoverable
What is rectification
Asking the court to rectify a written document to reflect what the parties agreed
What must you should for rectification
That the parties are in complete agreement on terms but by an error wrote them down wrong
When is rectification not allowed
Where parties were agreed in terms of agreement but made a mistake as to the meaning of those terms
Non est factum
Not my deed
The person signing the doc is fundamentally mistaken as to the nature of it
Void
Cannot be result of carelessness
What is common mistake
Both parties make same mistake. There is a reasonable basis for mistake. It makes performance impossible
Consequence of common mistake
Void
Another name for common mistake
Initial failure
Another name for frustration
Subsequent failure
What is frustration
An event makes performance of the contract illegal, impossible or radically different
Event is not the fault of either party
Effect of frustration
Contract is not void but parties are excused from further performance
Performance before frustration remains binding
What does frustration not apply
Performance is possible but more burdensome
Event was foreseeable but parties failed to make provisions for it
Can performance for pre payment before frustration be recovered
Law reform (frustrated contracts) act 1943
Recover just sun for performance that conferred a valuable benefit on party but only out of money paid or payable before frustration and cannot remove any money on top of that
Recover prepayments but may deduct expenses
Can you recover expenses under fustrated contract
Not unless there is some prepayment to deduct them from
what is another name for mutual mistake
cross-purpose mistake
when is it not possible to rely on common mistake
if one party is at fault
if contract makes provisions for it
if it is not fundamental (impossible or radically different)
is a mistake regarding the quality of the item enough to be fundamental for common mistake
no
are illegal contracts enforceable
no and cannot recover benefits conferred unless only 1 party knew it was illegal and lawful wrong was incidental to performance of otherwise legal contract then the innocent party can enforce it but the other cannot
are restraint of trade clauses valid
normally void unless:
legitimate business interest to protect and restraint is reasonable (location, duration, scope)
consequence of duration and undue influence
voidable
can you get damages for duress or undue influence
no but voidable
does duress have to be the only reason you entered into the contract for it to be voidable on this ground
no it just needs to be A reason, doesn’t have to be the ONLY reason
is legitimate commercial pressure economic duress
no
what to do if a party won’t return property when recinding a contract
get an order of recission from the court
requirements to show economic duresss
illegal or improper threat
no choice due to pressure
illegitimate pressure
pressure is significant cause of contracting
how to rebut presumed undue influence
show they got independent advice
is delay a frustrating event
no - more likely to be a breach of contract
if contract is frustrated to parties have the choice to affirm the contract
no - obligations come to an end and parties have no choice
can a contract be frustrated by an event for which the contract makes provisions
no
are force majeure clauses required to be reasonable
yes force majeure clauses are governed by reasonableness test in UCTA
