Mistake and illegality Flashcards
what are the different types of mistake?
common mistake
cross-purpose mistake
unilateral mistake
what is common mistake?
where both parties have made a fundmental mistake- this has limitations
what are the restrictions/limitations on common mistake?
it will not operate if one party is at fault, contract must not make express provision on the matter, mistake must be fundamental i.e. render performance of the contract impossible or radically different from what parties anticipated
what is a cross-purpose mistake?
where parties are literally at cross purposes about some crucial aspect of the contract- the mutual mistake negates consent and therefore no agreement is said to have been formed at all
what is unilateral mistake?
theres been a mistake as to the identity of the other contracting party but only where the identity of the other party is of vital importance makes the contract void Cundy v Lindsay
when can contracts be illegal?
at time of formation or because of they way they have been performed i.e. a contract is illegal where its formation, purpose or performance involved the commission of a legal wrong
what is the general rule about illegal contracts?
illegal contracts will be void and courts will not allow recovery of benefits conferred in the performance of an illegal contract
Ashmore, Benson, Pease v Av Dawson where both patties were aware that the performance was illegal, the courts take the view that neither party should be entitled to enforce it and the contract is void
what if the contracts are illegal at common law?
covenants in restraint of trade- common form clauses which are prima facie void as being contrary to public policy
when are restraints of trade enforceable?
there is a legitimate business interest to protect e.g. customers, employees AND the restraint is reasonable in terms of geographical area, duration and scope of the prohibited activities
