Mistake Flashcards
What is an operative mistake?
Mistake recognised in law as preventing a contract from taking legal effect
What is the effect of an operative mistake?
Contract is void
What does a void contract mean?
No legal effect from the outset
What is common mistake?
Both parties have same misapprehension.
What are the Circumstances where common mistake will not operate?
a) The mistake is not sufficiently fundamental.
b) One party is at fault.
c) The contract makes provision for the issue.
What is a mutual mistake?
Both parties mistaken but about different things.
What is the test applied for mutual mistake?
If reasonable third party could infer existence of a contract in a given sense, that contract is binding
What is a unilateral mistake?
One party is mistaken and other party knows/deemed to know
What are the three types of unilateral mistake?
- expression of intention
- nature of document
- mistake of identity
How can unilteral mistake as to the nature of documentation be proven?
Mistake due to:
o Blindness/illiteracy/senility of person signing or
o Trick/fraudulent misrepresentation as to nature of document, provided person took all reasonable precautions before signing.
What is the effect of a contract being voidable where there has been a mistaken identity and goods have passed to an innocent third party?
title can pass to buyer from fraudster if buying in good faith/without knowledge of defect in title
What is the effect of a contract being void where there has been a mistaken identity and goods have passed to an innocent third party?
no title passes and buyer has to return
What is considered for a unilateral mistake of identity?
Importance of the identity
Which situations are courts more likely to find there was a unilateral mistake of identity?
Distance selling
