MISTAKE Flashcards
Both parties mistakenly believe they have agreement
Successful bid for bulk of steel with intention that “building” steel be included – seller did not intend to include it – 3rd party auctioneer said it may be included – buyer relies on 3rd party, pays for it – seller refuses to deliver the building steel – Staiman Steel v Commercial p.552
Unilateral mistakes as to terms
Wants to buy “Old” oats but actually buys “new” oats – buyer refuses to accept anything but the “old” oats, says they had discussion about this, and it was agreed between parties that the sale would be of “old” oats – seller says buyer was mistaken as to quality of oats – did seller know what it was buyer was asking for? – Smith v Hughes p.554
Mistakes in tender bids
Contractor forgets to include labour costs in tender bid, tells owner of the tender they forgot this after submitting bid but before acceptance - tenders close, acceptance – contractor says the owner cannot accept because they know bid was mistaken – owner claims this is a recoverable bid because they gave notice, so owner refuses to refund bid deposit - R v Ron Engineering p.562
Agreements made under mistaken assumptions
Employees breach contract – breaches would justify termination, but not discovered – company later absorbed by larger company, who reach severance deal with these employees to buy them out – after severance, company learns of these earlier breaches; grounds for dismissal – company says severance agreement was made under mistake of fact – can you void agreement after the fact if you learn new information? – Bell v Lever Brothers p.568
Buys rights to a shipwreck at specific coordinates, salvage expedition reveals no shipwreck at these coordinates – was never there, only a rumour – is contract between buyer and commonwealth void due to mutual mistaken assumption? - McRae v Commonwealth Disposals p.573
Equity
Mistake of rental agreement – set at 250 pounds per month for 7 years – told it would not be subject to rent control – but it was under rent control, which fixed the rent only at 140 pounds per month – should contract be void for mistake of fact? – Solle v Butcher p.580
Boat at sea experiences structural damage, distress call – Great Peace/potential “rescuer” contacted by 3rd party on behalf of damaged ship, tell them it’s not far away (35miles) – Great Peace accepts, undertakes to go there and save them – finds it is much further away (410 miles) – terms of agreement allowed defendant to cancel on payment of 5-day fee – contract voidable at common law or equity? – Great Peace Shipping v Tsavliris Salvage p.583
Contract to supply materials to construction company – signed agreement, acknowledgment of full payment for all materials supplied – supplier later discovers deliveries it forgot to bill to constructor, who relied on prior agreement to avoid payment – common mistake? – Miller Paving v B. Gottardo Construction p.589
Mistaken identity
Fraudulent driver’s license posing as someone else – goes to car dealership, buys car with license subject to obtaining financing – produces “high-purchase contract” where dealership sells car to a finance company, who then “hires” car to buyer and makes monthly payments – dealership agreed, sells – imposter buyer then sells car to someone else and disappears – finance company claims the value of car from subsequent buyer - Shogun Finance v Hudson p.594
Documents mistakenly signed = Non Est Factum
Old woman induced to sign a document her nephew uses to secure her house – she said she signed it, her glasses were broken, couldn’t read, trusted her “scumbag” nephew – classic case of non est factum – can she escape the contract? – Saunders v Anglia Building Society p.602
Careless failure to read document before signing – is non est factum applicable to such a person who carelessly fails to read document before signing, knowing it has legal effect, where it permits a fraud on another innocent party? – signers of document told it was “unimportant amendment” but actually was a 2nd mortgage – Marvo Color Research v Harris p.604
Rectification
Written agreement signed without reading – oral agreement transcribed to written agreement – oral agreement was for “110 yards” but changed in writing to “110 feet” by defendant, fraudulently misrepresented the contract knowing it was contrary to oral agreement – defendant saw plaintiff sign without realizing the mistake - can rectification be granted? – Sylvan Lake Golf & Tennis Club v Performance Industries p.614
Can rectification be invoked to change an agreement because the agreement had unanticipated consequences? – Canada v Fairmont Hotels p.623
