Mistake and illegality Flashcards
What are the three types of mistake?
Common mistake
Cross-purpose mistake
Unilateral mistake
What is a common mistake?
Where both parties make the same fundamental mistake.
The mistake must render performance impossible or radically different from what the parties anticipated.
What is a cross-purpose mistake?
Where it is impossible to resolve the ambiguity over what is agreed.
The only possible conclusion is that there was no contract.
What is a unilateral mistake?
Where only one party is mistaken.
When can the contract be void as a result of a unilateral mistake?
Only a genuine reason
e.g. Bona fide purchasers acquiring the goods
What is an illegal contract?
The contract’s purpose, formation of performance involves the commission of a legal wrong.
Does not include contracts where an illegal act is purely incidental to performance.
When are contracts considered illegal under common law?
Where contracts are contrary to public policy or morality.
Some restraint of trade covenants.
When are restraint of trade covenants enforceable?
Where there is a legitimate business interest to protect
AND
The restraint is reasonable in terms of area, duration and scope
What is the remedy if someone has breached a restraint of trade covenant?
The party who imposed it may apply for injunctive relief to prevent/curtail a breach.
Otherwise it may apply for damages as a result of the breach.
