Mistake/Impossibility

Question 1

What happened in Bell v Lever Bros?

Answer 1

Atkin LJ: courts intervene on mistake as to identity/existence/title, mistake as to quality must be fundamental

Question 2

What cases are important in the development of equity and mistake?

Answer 2

• Cooper v Phibbs
• Solle v Butcher [1949]
• Magee v Pennine Insurance Co Ltd
• Credit Du Nord
• Great Peace Shipping

Question 3

What is needed for common mistake? (Great Peace)

Answer 3

i) common assumption
ii) no warranty for either
iii) fault not attributable to either
iv) non-existence makes impossible

Question 4

What are some criticisms of the Great Peace?

Answer 4

• Midwinter 2003: approach to precedent
• Reynolds 2003: without reviewing
• Chandler, Devenney and Poole 2004: failed to adequately analyse

Question 5

Give five cases concerning frustration.

Answer 5

• Taylor v Caldwell
• Davis Contractors v Fareham UDC
• Gamerco SA v ICM
• Krell v Henry
• Herne Bay Steamboat Co v Hutton

Question 6

Can frustration succeed if self induced?

Answer 6

NO - Maritime Natuonal Fish Ltd v Ocean Trawlers Ltd

‘caused or permitted to come about’

Question 7

What happens when there is supervening illegality?

Answer 7

Avery v Bowden [1856]: ship carrying cargo, then became illegal to load at port

Question 8

What happens when there is additional cost and difficulty?

Answer 8

• Davis Contractors v Fareham UDC:
  foresaw delay, could have prevented
• Tsakirogolou: not frustrated
• The Nema (No2) ‘at a certain point in delay performance of the relevant contractual obligations becomes radically different’

Question 9

Give three cases concerning common assumption of risk.

Answer 9

• Sea Angel [2007]: multifactorial approach + matrix of fact
• Empresa Cubana De Fletes: 18 month contract, Basra 8 months
• Bank Line Ltd: may not provide for ever contingency

Question 10

Define a force majeure and a hardship clause.

Answer 10

Force majeure: Promisor released from contract clauses under certain conditions e.g. acts of god
Hardship: allows party to modify contract in event of a ‘hardship’

Question 11

What are the effects of frustration?

Answer 11

• Both parties excused from future performance
• Chandler v Webster: £100 deposit paid, losses must stay as they are
• Fibrosa (1943): could recover £1000, did not take into account consideration!!

Question 12

What reform is lined up for the doctrine of frustration?

Answer 12

Law Reform (Frustrated Contracts) Acr 1943

• Deals with financial consequences (Fibrosa)
• S1(2) deposits - if consideration paid may not be recoverable
• S1(3) where valuable benefit obtained, equal recompense available

Question 13

What is a ‘valuable benefit’?

Answer 13

BP Exploration v Hunt: Goff J - services OR end value

Question 14

Give examples of mistake as to existence.

Answer 14

• Courturier v Hastie: Contract for sale of corn, had already been sold
• SOG Act 1979: w/o knowing has deteriorated, contract is void
• McCrae v Commonwealth Disposals Commission: should have known