Mistake Flashcards
Clark v Lindsay (1902) 88 LJ 198
An example of risk allocation in action, term in contract allocating risk of royal profession being postponed. Had this not been here then doctrine of mistake would have been applied
Associated Japanese Bank v Credit du Nord [1988] 3 All ER 902
Check to see if the contract allocates the risk to one of the parties (whether express or implied)… The doctrine of mistake only applies where it does not.
Approved in Williams Sindall v Cambridgeshire CC that all risk for unknown defects in goods are impliedly allocated to the buyer.
Furthermore Lord Atkin’s sound horse example presents that mistake can never be used for defect of quality… Unless it makes the contract an essentially different thing than that which it was believe to be.
Lord Thankerton: mistake only relates where both parties accept it is an essential and integral part of the contract.
Sale of Goods Act 1979, section 6
Where there is a contract for the sale of specified goods and without the knowledge of the seller the goods have perished at the time the contract was made, the contract is void
Bell v Lever Bros [1932] AC 161 (HL)
There was no fundamental mistake in offering the employees a £30,000 redundancy fee so therefore contract is not void. This has made it unclear whether a contract can ever been void for fundamental defect of quality.
Solle v Butcher [1950] 1 KB 671
Denning LJ wanted equity to apply to a wider range of mistakes and make rescission available. Approved by Steyn in Associated Japanese Bank v Credit du Nord. Best system is to have a narrow doctrine of mistake with a flexible doctrine of equity.
Great Peace Shipping Ltd v Tsavliris Salvage (International) Ltd, The Great Peace [2002] EWCA Civ 140
There doesn’t seem to be an equitable jurisdiction for mistake, but it is the most logical and sensible way of dealing with such issue.
The CA felt that Lord Denning was wrong in trying to develop the law in Solle v Butcher. More info page 53 of notes.
Lord Phillips MR test for mistake:
(1) there must be a common assumption as to a state of affairs;
(2) there must be no warranty by either party that that state of affairs exists;
(3) the non-existence of the state of affairs must not be attributable to the fault of either party;
(4) the non-existence of the state of affairs must render performance of the contract impossible;
(5) the state of affairs may be the existence, or vital attribute, of the consideration to be provided or circumstances which must subsist if performance if the contractual adventure is to be possible
Raffles v Wichelhaus (1864) 2 H & C 906
Generally accepted reasoning for this case is that the contract was so ambiguous that no reasonable person would know what was meant, so it was therefore void.
Scriven v Hindley [1913] 3 KB 564
Mistake between hemp and tow was so fundamental it made the contract void. It must be shown that a reasonable person would have made the same mistake.
Wood v Scarth (1858) 1 F & F 293
Where specific performance would be inappropriate then a remedy of damages will be provided.
Hartog v Colin & Shields [1939] 3 All ER 566
Confusion between per piece and per pound differed from negotiations. This was a fundamental mistake that deemed the contract void.
Boulton v Jones (1857) 2 H & N 564
A cannot make an offer to B which is accepted by C when C knows the offer is not to them (more details on page 56)
Cundy v Lindsay (1878) 3 App Cas 459 (HL)
Handkerchief mistake case. Where able to make contract void due to mistake and obtain the hankerchieves. This seems very unfair and inconsistent with other doctrines as the 3rd party had paid a fair market price.
Kings Norton Metal Co v Edridge [1897] 14 TLR 98 (CA)
Misrepresentation of attributes does not amount to mistaken identity. Case concerning Hallam & Co.
Phillips v Brooks (1919) 2 KB 243
Ring shop case; the shopkeeper had contracted with the person in from of him so was no void for mistake, it was still the shopkeeper’s responsibility to wait for the check to clear
Ingram v Little [1961] 1 QB 31 (CA)
Case with old ladies selling car, allowed to rely on mistake, likely to be refined to its own facts as difficult to distinguish from Phillips v Brooks.
