Rescission

Question 1

A Roberts & Co Ltd v Leicestershire County Council [1961] Ch 555

Answer 1

The court considered the circumstances required for rectification of a contract after a unilateral mistake.
Pennycuick J said: ‘a party is entitled to rectification of a contract upon proof that he believed a particular term to be included in the contract, and that the other party concluded the contract with the omission or a variation of that term in the knowledge that the first party believed the term to be included.

The principle is stated in Snell on Equity, 25th edition (1960), p 569 as follows: ‘By what appears to be a species of equitable estoppel, if one party to a transaction knows that the instrument contains a

Question 2

Solle v Butcher [1950] 1KB 671

Answer 2

The landlord (D) purported to increase rent from £140 to £250.

However, the parties had not abided by the legally required procedure to vary rent under the Rent Acts, as such the actual rent payable by the tenant (C) was fixed at £140 under the law.

C sued D for restitution of overpaid rent.

D made a counterclaim for rescission of the lease on the ground of common mistake so as to avoid paying restitution for rent that was already paid.

The lease contract was voidable and was set aside.

Question 3

Great Peace Shipping Ltd v Tsavliris Salvage (Int’l) Ltd [2003] QB 679

Answer 3

D offered their salvage services to a ship that suffered damage
D chartered.

The Great Peace that was supposedly 35 miles away, but was actually 410 miles away.

D contracted with a nearer vessel and cancelled the charter with C.

The charter provided that D have to pay compensation in the event of cancellation, but D refused to pay
C made claim for cancellation fee.

D argues that contract was void under common law or voidable under equity for common mistake

C’s claim succeeded as there was no common mistake

There is no doctrine of equitable common mistake