Mistake Flashcards
What are the three types of mistakes in contract law?
Common mistake, mutual mistake, and unilateral mistake.
What is a common mistake in contract law?
A mistake shared by both parties about a fundamental fact of the contract.
What is a mutual mistake in contract law?
A misunderstanding where both parties are mistaken but about different aspects of the contract.
What is a unilateral mistake in contract law?
When only one party is mistaken about a term, fact, or condition in the contract.
What case established that a contract can be voided for a common mistake about the existence of the subject matter?
Couturier v Hastie (1856).
What is the significance of Great Peace Shipping Ltd v Tsavliris Salvage (2002)?
It established stricter criteria for common mistakes to void contracts.
What is the “quality of subject matter” mistake, and what case exemplifies it?
A mistake about the quality of the goods or subject matter; Bell v Lever Brothers (1931).
What case illustrates mutual mistake regarding the subject matter?
Raffles v Wichelhaus (1864).
How does unilateral mistake affect contract validity?
A unilateral mistake may void a contract if the non-mistaken party knows of the mistake and exploits it.
What did Hartog v Colin & Shields (1939) decide regarding unilateral mistakes about price?
A contract was void because the buyer knew the seller made an error in pricing.
What is the test for rectification in cases of mistake?
There must be evidence of a mutual intention not reflected in the written contract.
What does Cundy v Lindsay (1878) establish about mistaken identity in contracts?
Contracts are void if the mistaken party intended to contract only with a specific individual.
How does Shogun Finance Ltd v Hudson (2003) apply to mistake and identity?
It confirmed that face-to-face contracts presume agreement unless fraud undermines it.
What principle about written contracts was affirmed in Smith v Hughes (1871)?
A contract remains binding if a mistake was not induced by the other party’s behavior.
What distinguishes a mistake of fact from a mistake of law?
A mistake of fact involves incorrect assumptions about circumstances, while a mistake of law involves misunderstanding legal principles.
How did Kleinwort Benson v Lincoln City Council (1998) influence the recognition of mistakes of law?
It allowed mistakes of law to void contracts, like mistakes of fact.
What is the significance of Raffles v Wichelhaus (1864) for genuine agreement?
It showed that mutual misunderstanding about key terms could negate agreement.
When does a common mistake render a contract void?
If it concerns a fundamental fact essential to the contract’s existence or performance.
What is the test for a mistake as to the quality of the subject matter, according to Bell v Lever Brothers (1931)?
The mistake must involve both parties and make the item essentially different from what was agreed.
What is commercial impossibility in common mistake, and which case exemplifies it?
Griffith v Brymer (1903): Contracts are void if unforeseen events make performance commercially unfeasible.
What key principle about unilateral mistake was established in Smith v Hughes (1871)?
A contract is not binding if one party knew the other misunderstood terms and exploited it.
How did Hartog v Colin & Shields (1939) address unilateral mistake about pricing?
The buyer knew of the pricing error, voiding the contract due to lack of genuine agreement.
What does Cundy v Lindsay (1878) illustrate about unilateral mistakes of identity?
A contract is void if a rogue misrepresents their identity and the mistaken party intended to contract with a specific person.
What did Great Peace Shipping Ltd v Tsavliris Salvage (2002) decide about common mistake and its criteria?
The mistake must render performance impossible and not result from either party’s fault.
How does equity approach common mistakes, as outlined in Solle v Butcher (1950)?
Equity allows rescission if both parties shared a fundamental misunderstanding and the claimant is not at fault.
What is rescission, and when is it granted in equity for mistakes?
Rescission cancels the contract and is granted when both parties were mistaken about fundamental facts or rights.
What did F.E. Rose (London) Ltd v William Pim Jnr & Co. (1953) establish about rectification?
Rectification corrects documentation errors reflecting the true agreement, based on outward acts, not inner intentions.
How does Chartbrook Ltd v Persimmon Ltd (2009) clarify the requirements for rectification?
It requires proof of common intention, outward agreement, persistence of intent, and a discrepancy between intent and the document.
How does equity address specific performance in the context of mistake?
Courts may refuse specific performance if enforcing the contract would be unjust, as in Tamplin v James (1880).
What role does the Law Reform (Frustrated Contracts) Act 1943 play in cases of mistake?
It provides remedies for contracts frustrated by unforeseen events, balancing fairness with certainty.
What is the relationship between common law and equitable mistake?
Common law renders contracts void for mistake; equity offers flexible remedies like rescission or rectification.
What did Daventry District Council v Daventry & District Housing Ltd (2011) contribute to the doctrine of rectification?
It reinforced the need for clear evidence of mutual intention to rectify errors in contract terms.
How do courts determine the impact of mistake on consent?
Mistakes that negate genuine consent (e.g., identity, existence, or quality) can void the contract.
How does the Great Peace Shipping case influence modern views on mistake in equity?
It restricts equitable relief, emphasizing legislative reform rather than judicial flexibility for mistake doctrines.
