Mistake Flashcards
In which circumstances might section 6 of the Sale of Goods Act 1979 apply?
A negotiates with B for the purchase of a large number of leaves for a fashion show. By the time the contract is signed, the leaves have decomposed.
Name three types of mistake
Common mistake
Mutual mistake
Unilateral mistake
Three categories that cause action
Res extincta - the subject matter of the contract no longer exists
Res sua - where the goods already belong to the purchaser
Mistake as to quality - only available in very narrow limits
What is Common Mistake
Common mistakes exist where both parties to the contract make the same mistake
What is Mutual Mistake
A mutual mistake is one where the parties are at cross purposes. The courts apply an objective test to see if the contract can be saved. Ie would a reasonable person looking at the correspondence between the parties have understood the contract to have a single meaning. If yes the contract is valid on that meaning. If a reasonable person could not determine the meaning then the contract will be void for mistake
What is Unilateral Mistake
In unilateral mistakes only one of the parties is mistaken. There are two categories within unilateral mistakes: mistakes relating to the terms of the contract and mistakes as to identity
Summary of Res extincta and linked cases
Res extincta will apply where both parties enter a contract with the belief that the subject matter exists when in fact it does not exist. The contract will be held to be void for mistake
- Scott v Coulson
- Couturier v Hastie
Summary of Res extincta and linked cases
Res extincta will apply where both parties enter a contract with the belief that the subject matter exists when in fact it does not exist. The contract will be held to be void for mistake
- Scott v Coulson
- Couturier v Hastie
Summary of Res Sua and linked cases
This applies where a party contracts to buy something which in fact belongs to him. This will generally render the contract void. Although if the action is based in equity this will render the contract voidable
-Cooper v Phibbs
Summary of Mistake as to quality and linked cases
A mistake as to quality is only capable of rendering a contract void where the mistake is as to the existence of some quality which renders the subject matter of the contract essentially different to that what it was believed to be
- Bell v Lever Bros
- Leaf v Int Galleries
- Great Peace Shipping v Tsavliris (International) Ltd
What is Mistake as to Identity?
Mistakes as to identity are generally induced by fraud in that one of the parties is claiming to be someone who they are not.
When will a contract be void in Common Mistake?
Res extincta- When the subject matter of contract no longer exists. FE if you buy something that is being delivered and when it arrives it is decomposed like food or something (Sales of goods act section 6 covers this)
Res Sua- When a mistake has been made as to the ownership of subject matter. FE if someone owns something rightfully unknowingly and purchases said item a second time then the second contract would be void as they are already the rightful owner (Cooper V Phibbs)
Mistake as to quality- Contracts are not often made void in this instance (Bell V Lever Brothers) However it was in the instance of The Great Peace.
True or false? A party is not bound by a contract if he entered it under a mistake.
FALSE
It is not enough that one party was mistaken; there must be other factors, such as that the other party knew of his mistake, or there was a shared fundamental mistake of fact.
Lord Phillips 5 principles from great peace
There must be a common assumption as to the existence of the state of affairs.
b) The non-existence of the state of affairs must render the performance of the contract impossible. c) The non-existence of the state of affairs must not be attributable to the fault of either party. d) The common assumption must be communicated orally by one party to the other.
