mistake

Question 1

what is the relief for mistake under s 28 CCLA

Answer 1

governed by the CCLA, superseeing the common law: it can cancel, vary or grant relief by way of restitution or compensation - but the list of ways is not limited

Question 2

what are the requirements for mistake under s 24(1)

Answer 2

(a) - mistake
(b) - relevant point in time for mistake - only applies to mistakes made before or at the point the contract was entered into, mistakes made after are irrelevant
(c) types of mistake - unilateral, common and mutual mistakes have different things to prove

Question 3

what is the definition of mistake under s 28

Answer 3

“mistake means a mistake, whether of law or of fact”

Question 4

what is a mistake of law under s 23(2) CCLA

Answer 4

a mistake in the interpretation of a document, but this document must not be the contract - NOT a mistake in the interpretation of the contract (s25(1))

Question 5

what is a mistake of fact under s23(1) CCLA

Answer 5

a mistake of a past or present fact (not about future conduct) - Compcorp v Force Entertainment centre (not defined in CCLA)

Question 6

mistake requires?

Answer 6

a misconception or an error of judgment and is not given where a party or parties have not turned their minds to the topic at issue

Question 7

what happens if both parties were aware of a fact but had forgotten that fact when entering into a contract?

Answer 7

mistaken belief - mistake of fact within the meaning of s 23(1) CCLA, Slater Wilmshurst v Crown Group Custodian

Question 8

when does mistake in the interpretation of the contract occur

Answer 8

someone who (Crighton v Pilbrow):

• reads the contract and misunderstands it (with or without legal advice)
• does not read the contract but signs it on the basis of its general description and an assumption about what that description means or what someone has told them it means

Question 9

is a mistake in the interpretation of a guarantee a mistake in the interpretation of a document or the contract

Answer 9

the guarantee forms part of the contract so s 25(1) applies rather than s 23(2) and there is no relief under the CCLA - Shotter v Westpac Banking

Question 10

it follows from s 25 CCLA that contracts are to be construed ?

Answer 10

objectively (Paulger v Butland Industries) - otherwise there would be great legal uncertainty if a party could plead as a mistake that it understood the contract to mean something different from its ordinary meaning

Question 11

when is the relevant point in time for a mistake

Answer 11

the CCLA only applies to mistakes made before or at the point the contract was entered into (‘in entering into the contract’) so mistakes made after are irrelevant

Question 12

what are the 3 types of mistakes

Answer 12

unilateral mistake, common mistake, mutual mistake

Question 13

what is a unilateral mistake

Answer 13

one person’ mistake - often falls through because it has to be ‘known to the other party’ and ‘ought to have known’ is not sufficient. there must be actual knowledge (when the contract was entered into - King v Wilkinson) of the mistake, a mistake that is material to the plaintiff and with an influence element

Question 14

what is a common mistake

Answer 14

the parties must have made the same mistake - no knowledge requirement

Question 15

what is a mutual mistake

Answer 15

different mistakes are made about the same matter of fact or law - no knowledge requirement

Question 16

for s 24(1)(a)(iii) CCLA to apply (mutual mistakes), three possibilities to understand the matter must be conceivable - what are they?

Answer 16

• the objectively correct understanding of the matter
• the mistake of the plaintiff about the matter
• the mistake of the defendant, which is different from the mistake of the plaintiff but about the same matter

Question 17

what is the second requirement for a mistake

Answer 17

influence (s24(1)(a)) - mistake must be a material factor, but need not be the main reaosn for the parties having entered into the contract

Question 18

how does affirmation of the contract under s 26 CCLA apply to mistake

Answer 18

this negates the remedy of mistake - you cannot benefit from your own misconduct.

Question 19

what is inequality of value under s 24(1)(b) CCLA

Answer 19

you have to find a substantial unequal exchange of values. through case law, substantial means between 10-15%. You can use numbers to calculate this or if not given can take a wholistic approach and consider what they lost as a result of the mistake and whether that is substantial. A key example if the difference in price inclusive/exclusive of GST as this is 15%

Question 20

what does s 24(1)(c) CCLA state about assumption of risk of mistake

Answer 20

the assumption must be specific, but then they cannot get out of their assumption of risk e.g. for damage while transporting goods, as they have assumed the risk in the contract and the contract takes precedence so we apply that

Question 21

if s24 is satisfied, what relief may there be

Answer 21

s23(4) - ‘there is a contract’ and there is discretion of the court to make orders s28(2) “in particular.” They can declare the contract valid, cancel the contract, vary the contract of transfer property under s 28(3). they have to consider who caused the mistake (s27) and what is just in the case

Question 22

what are the third party rights relating to property subject to the mistaken contract under s 31

Answer 22

if the third party acted in good faith and didn’t know about the mistake they get to keep the property. If they acted in bad faith, knowing about the vitiating element, the property can be returned to the owner

Question 23

what is non est factum under s 22(3)(a)

Answer 23

= it is not my deed. This provides an alternative remedy to mistake, with the advantage being that damages may be available under the CCLA. This means there is no contract in the first place and so effects third parties as the property would have to be returned to A. The scope of application is very limited (plaintiff is illiterate, forgot her glasses or cannot speak English) but in most cases it falls through because the plaintiff has the burden of proof to show they exercised reasonable care.

Question 24

what are the requirements for non est factum and which case do they come from

Answer 24

Bradley West Solicitors Nominee v Keeman:

1. the person raising the plea must have signed the document believed it to have a particular character or effect
2. the document must in reality have a radically different character or effect, thus creating a wholly different result from that which was understood by the proponent. E.g. an extension of an option is radically different from a receipt but if the proponent has appreciated the legal nature of a document and is mistaken only as to its contents, unless the mistake is fundamental it is not radically different.
3. the proponent’s mistaken belief must have resulted from an erroneous explanation or description of the document given to him by someone else - causality
4. the proponent must show that she acted with reasonable care - when the reading out to the person did not correctly state what was in the writing, whether the proponent was justified in believing what he was told by the other party depends on whether it would have aroused a reasonable person’s suspicions. reasonably care is not given where the proponent did not take steps to understand the document before signing, such as seeking independent advice, unless there were good reasons for not doing so.

Question 25

in what cases may non est factum be more readily available

Answer 25

where there is no innocent third party involved

Question 26

what is rectification under s22(3)(b) CCLA

Answer 26

• limited scope of application.

parties can rectify the written agreement so it can match the oral agreement, but often this falls through because they have to show evidence of the oral agreement and how it differs from the written agreement. it only solves a discrepancy between an oral agreement and a written contract and doesn’t apply when the oral agreement also suffers from a mistake.

Question 27

what are the requirements for rectification and which case do they come from?

Answer 27

Westland Savings Bank v Hancock, Chartbrook v Persimmon Homes, Swainland Builders v Freehold Properties:

1. oral agreement or at lease common intention of the parties on the terms of the agreement
2. parties drew up a written document
3. intention continued at the time of the execution of the agreement
4. by mistake, the written document fails to reflect that common intention
   - the court may order the mistaken portion to be struck out and replaced with words that do reflect what was actually agreed

Question 28

when is rectification available or not

Answer 28

only available if the mistake is not in the formation of the agreement but in the reduction of the agreement into writing. it is not available if the document accurately records what was agreed even though the agreement itself was based on a mistake.

rectification is not available it:

• the plaintiff has delayed abnormally in seeking the remedy
• the contract can no longer be performed
• some third party has in good faith acquired rights to the subject matter for value and without knowledge of the mistake

Question 29

who is the burden of proof for rectification on

Answer 29

• on the party seeking relief - South Island Deepwater Fisheries v Attorney-General

Question 30

what must there be clear evidence of for discharging the burden of proof for rectification

Answer 30

1. there was a common intention
2. the document to be rectified does not accord with what was intended
3. in its rectified form it would
   - oral evidence can be admitted to establish the antecedent intention/argument and the court may look at the parties’ post-contractual actions of evidence of what they had agreed. the fact that a party has acted as if the document stood in the form to which it is sought to be rectified is evidence of the existence of an intention on the part of that party to contract in those terms

Question 31

what happens to rectification with a unilateral mistake

Answer 31

here only the applicant for rectification was mistaken and a term beneficial to the applicant has been omitted. rectification is not available for a unilateral mistake of which the other party had no knowledge (Wrightson v Clapham Masterton). It is only available where only one party’s intention is incorrectly recorded and the other party is aware of the situation (Laurence v Steffert Farms)

Question 32

what are the requirements for rectification in the case of a known unilateral mistake and what case do they come from

Answer 32

Thomas Bates v Wyndham’s:

1. the plaintiff erroneously believed that the written document gave effect to the parties’ previously agreed common intention
2. the defendant knew that it did not and that the relevant omission was due to a mistake on the plaintiff’s part
3. the defendant failed to draw that mistake to the plaintiff’s attention before executing the document
4. the mistake would either benefit the defendant or be detrimental to the plaintiff

Question 33

who is the burden of proof on for rectification and what case do these ideas come from

Answer 33

Roberts v Leicestershire County Council:
- applicant must show:

• that it was intended to include the beneficial term and
• that the defendant allowed the written contract to be executed without it
• knowing that the applicant was ignorant of the omission