Mistake Flashcards
What will happen if there is a mistake?
It will be void
What are the types of mistake?
Common mistake
Mutual mistake
Unilateral mistake
What is common mistake?
Both parties make the same mistake
What are the types common mistake?
Rea extincta
Rea sua
Mistake as the quality
What is res extincta?
Subject matter of the contract no longer exists
What is res sua?
Where the goods already belong to the purchaser
What is mistake as to the quality?
Only available in very narrow limits where the subject matter is different to what is set out in the contract
What case is related to res extincta?
Couturier v Hastie
Facts of Couturier v Hastie
At the time of contract both parties thought the corn in transit from India existed
It perished during transit
C claimed D for corn as D accepted
Outcome of Couturier v Hastie
The court declared it void, there was no subject matter, thus a common mistake res extincta. There was no contract
What else is relevant to res extincta?
S6 of sale of goods act 1979
What does S6 of sale of goods act 1979 state?
Covers where goods have perished
What case is relevant to res sua?
Cooper v Phibbs
Facts of Cooper v Phibbs
The uncle mistakenly told his nephew he (the uncle) was entitled to a fishery
The uncle died and the nephew entered an agreement with the uncles daughter to rent the fishery
Outcome of Cooper v Phibbs
The fishery actually belonged to the nephew
House of Lords held the contract was void at common law
What is mutual mistake?
The parties are at cross-purposes
How is a mutual mistake established?
Courts apply an objective test to see if the contract can be saved - ‘would a reasonable person looking at the correspondence between the parties have understood the contract to have a single meaning?’ If no, the contract is void
What is the objective test?
‘would a reasonable person looking at the correspondence between the parties have understood the contract to have a single meaning?’ If no, the contract is void
What is a unilateral mistake?
Where one party makes a mistake and the other is aware of it
What can be the cause of a unilateral mistake
Identity of one of the parties
Terms of the contract
Explain unilateral mistake involving the identity of one of the parties
Contract will only be void if the contracting person is of fundamental importance and this importance is made clear by the party
What case is related to terms of the contract?
Hartog v Colin and shields
Facts of Hartog v Colin and shields
In the final offer C accidentally wrote the wrong amount (giving D a better deal). D never corrected them and signed the contract
Outcome of Hartog v Colin and shields
Contract was void as D must have known about the error
