MISTAKE Flashcards
void or voidable
mistake is the only factor that may makae a contract void
mistake
- difficult to succeed in claim for mistake
- in general a party does not have the right to have a contract set aside becausde a mistake was made though they can agree to end
- a contract may indeed be held to be void as a esult of an operative mistake by either or both parties
- the mistake must be made before the contract is entered into
Amalgamated investment and property co ltd v John Walker and sons Ltd (1977) - 2 days after the contract was signed property restricted use and reduced value
held: not void for mistake
-
common mistake
both parties make same mistake
both parties are in agreement but it is on the basis of a fudamental shared mistake
Kleinwort Benson v Lincoln CC (1999)
- subject matter of the contract did not exist at teh time of contract
Scout v coulson (1903)
- contract for sale of life insurance policy but the holder died 3 years ago
held: common mistake and contract not valid
Sale of goods act 1979 s3- without knowledge of the seller, goods have perished at the time the contract is made- contract void
Mcrae v The commonwealth disposals commission (1951)
- salvage oil tanker
- but no oil tanker or ship
- valid contract in which D warranted the ship
- contract breach and damages of breach awarded
- apply when contract was impossible to perform
physicl impossibility of the land was not capable of growing that quantity of crop
Sheikh Bros v Oschner (1957)
legal impossibility - contract to buy the lease of a business which the purchaser already owned
cooper v phibbs (1867)
Common mistake quality or value
will a common mistake about quality or value make the contract void- no unless its essentially different to what it was believed to be
Bell v Lever Bros (1932)
Leaf v International Galleries (1950)
- painting not by the famous painter but was still a painting of Salisbury Cathedral so contract not void for mistake
Great Peace Shipping v Tsalviliris (2002)
- was 410 not 35 miles
- did not amount to essentially different so contract not void
Associated Japanese Bank v Credit du Nord (1988)
- contract of guarantee between two banks for lease payment was void
- no machines and the whole thing a fraud and neither bank knew this so was common mistake and essentially different
mutual mistake
parties are at a cross-purposes but neither party is aware that the other is contracting on diff basis
Raffel v Wichelhause(1864)
- issue was whether the contract was for the purchase of a cargo of cotton from one of 2 ships with same name
void
unilateral mistake
only one party makes a mistake, which the other party is aware of
- only void if the party with knowledge is taking unfair advantage and the mistake is about a term
Hartog v Collins &Shields (1939)
- offered for price per pound instead of piece which was 1/3 of the price
- no contract as there was an unfair advantage
Chwee Kin Keong v Digilandmall.com Pte (2006)
printer for 3854 listed for 66
held: unilateral mistake
UL mistake identity
unilateral mistake may apply to any aspect of contract but most common is identity of party
case law distinguished between contract made face to face and those in riting
- if made face to face there there is a strong presumption that there is an intention to deal w the person the there not normally void
mistakes identity - face to face
philipps v Brooks (1919)
- gave fake identity in shop, cheque bounced and sold to innocent third party
held: not void so brooks could keep ring
Lewis v Averay (1972)
- pretended to be famous actor and bought car and cheque bounced and sold to third party
held: not void and averay could keep car
would have been able to avoid contract for misrep but only before it was bought
mistake identity in writing
made by a written correspondence then a fake identity may be void
Cundy v Lindsay (1878)
ordered goods by post and signed it blenkiron and sold goods
held: the contract between L and rogue was void and therefore could not pass the title to C and entitled to get it back
Shogun Finance v Hudson (2003)
- court affirmed the distinction between f2f and written
- car bought on hire purchase by rogue
- contract between the financy company and r was made by correspondence
held: contract was coid and the rogue could not pass title to H and were entitled to return of car
argued that the dealer was dealt f2f with crook was acting as agent of company
there no distinction between f2f and writing - mistakes as to identity should not make the contract void and Cundy v Lindsay should be overruled
Remedies
- if there is an operative mistake at common law making the contract void then parties must, as far as possible, be put back in their original position
Shogun and finance - no damages
- if there has been a mistake but not one which makes the coontract void at common law then in some situations equity may still have a limited role to play
remedies in equity
great peace shipping
- no powere to rescind contract ins equity for a mistake whcih is not operative at common law
- only equitable remedies which might now be available for such a mistake
- rufusal of special performance
- rectification
refusal of specific perf
- specific performance is an equitable remedy for breach, under which the court orders a contract to be performed
- deciding whether to oorder this remedy the court can take into accounth a mistake
- if there has been such a mistake made, the court might refuse to order specific performance and might have liability to damages
rectification of a mistake
- written contract which does not state what the parties agreed orally may be rectified if there was an error or omission due to either a common or UL mistake
Templiss Properties v Hyams (1999)- lease stated that the rent figuer includes business rated but intention has been that it excluded the rates - the tenant was aware of the mistake
- court ordered rectification
- rectification remedy will be lost by lapse of time or third party rights
written- non est factum
- usually if you sign a contract you r legally bound
- exceptionally the court will set aside a signed contract by allowing the plea of non est factum which is not my deed
- tricked or unabel to understand what they signing
Saunders v Anglia Building Society (1971)
conditions:
- docs must be radically or fundamentally diff to what was thought
- the person must not have been careless in signing
in saunders the plea of non est factum failed because the document wasnt radically different
- if the plea succeeds the contract is void
