Unilateral Mistake

Solle v Butcher

Common mistake in equity. Both were under the impression that the property could be let at a rent of £250 per annum. In fact, rent restrictions meant it could only be let for £140. C made a claim to recover the over-payment of rent, but D argued that the doctrine of common mistake applied and the lease should be rescinded. Held that common mistake at common law should be interpreted very narrowly: only if the mistake was such as to prevent the formation of any contract at all. But contract is also liable in equity to be set aside if the parties were under a common misapprehension either as to facts or as to their relative and respective rights, provided that the misapprehension was fundamental and that the party seeking to set it aside was not himself at fault. Ruled for rescission.

The Great Peace

Common mistake must make the contract impossible to make it void, risk had been allocated Lord Phillips stated, at [76]: [T]‌he following elements must be present if common mistake is to avoid a contract: (i) there must be a common assumption as to the existence of a state of affairs; (ii) there must be no warranty by either party that that state of affairs exists; (iii) the non-existence of the state of affairs must not be attributable to the fault of either party; (iv) the non-existence of the state of affairs must render performance of the contract impossible; (v) the state of affairs may be the existence, or a vital attribute of the consideration to be provided or circumstances which must subsist if performance of the contractual adventure is to be possible.

FSHC Group Holdings limited v GLAS Trust Corporation

Common mistake on guarantee Contract was to replace an old guarantee Couldn't be located And made a more onerous one by mistake Held here was a common mistake And rectified the old document

Sheikh Brothers Ltd v Ochsner

Common mistake: Physical impossibility. Licence to harvest sisal growing on land in Kenya in return for monthly delivery of sisal. In fact, the land was not capable of providing this quantity of sisal. Contract was void on the grounds of common mistake.

Couturier v Hastie

Common mistake: res extincta. Early common law position: If goods did not exist when contract was made, res extincta: contract is 'void ab initio'. Corn bought while on board a ship which, unbeknown to the parties, by the time the contract was made had deteriorated so much that it had been lawfully disposed of by the ship's master to someone else.

Cooper v Phibbs

Common mistake: res sua. Ownership of subject matter (res sua) leads to voidable contract in equity or void contract in common law. D agrees to transfer property (share in fishery) to C which the C already owns and neither party is aware of that fact.

Raffles v Wichelhaus

Cotton sales on Peerless Two ships Mutual mistake (in the sense that parties were at cross purposes) and there was no contract weak because judgement is unusual without justification

The Harriette N

Demurrage payment Wrong date was used 'Carelessness' Defendant knew of the mistake Was not a term of the contract and only collateral calculations are collateral terms

Ulster Bank v Lambe

Euros instead of pounds Rectification = can be used as a method to correct mistake This means you should probably let the other party know if you think they have made a mistake, because the court can enforce differe/correct terms onto you which you might not have assented to if they were the terms the other party intended to enter into contract to - good faith obligation?

Hartog v Colin & Shields

Hare skins at price per pound Meant per piece Usually sold by piece The buyer snapped up the offer Claimed the other party knew about the mistake Term mistake not quality

Apvodedo NV v Collins

Henderson J considered that, if literally interpreted, impossibility may be too strict a test and that 'the true test may rather be whether the non-existence of the state of affairs renders performance of the contract in accordance with the common assumption impossible' (emphasis original), adding that 'much would depend on precisely how the "contractual adventure" was identified'. (he stated the decision in the great peace was too harsh)

Dana Gas PJSC v Dana Gas Sukuk

LEGGATT J: 62 Thus, the doctrine of mistake can only apply if there is a gap in the contract. If the parties have expressly or impliedly agreed what is to happen if they turn out to have been mistaken about the matter in question—in other words, if the risk of the mistake has been allocated by their contract—there is no scope for the doctrine

Chwee Kin Keong v Digilandmall.com

Laser printers advertised as £66 Usually over £3000 Many bought before they realised mistake Mistake as to term because they didn't mean to put that price And buyers knew it was a mistake 'so absurdly low in relation to [their] known market value ... ought reasonably to have known'

Mutual Mistake

Mutual mistakes are cross purpose mistakes. Both parties allege a contract exists but on their terms. negative consent

Associated Japanese Bank v Credit du Nord

Non existent machines on a sale and lease back scheme Took the money and ran Claimed for guarantee clause of payments Guarantee was subject to an implied condition precedent that the machines existed and the defendant could not be liable due to it Void ab initio

Smith v Hughes

Objectivity if the promisee believes conduct is assent then it is Sale of oats, Sample shown Buyer thought old oats and seller thought new oats buyer's mistake collateral/ Quality of contract mistake (not a core term) and therefore no remedy.

OT Africa Lines v Vickers

Pounds instead of dollars Held not to be a mistake because they could still increase the price Other party couldn't have know of the mistake So the end result is either rectification or void

William Sindall v Cambridgeshire County Council

Purchased land Clause in contract stated the council was not liable for any 'easements, liabilities, and public rights affecting the land' Thereby risk was allocated to the purchaser And couldn't claim common mistake

Sherwood v Walker

Quality made the cow sale essentially different, common mistake

Olympia Sauna Shipping v Shinwa Kaiun Kaisha

Surprise at low fee but no reason to question it Consider the certainty of there being a mistake What the party might have expected there to be on the offer/term

Bell v Lever Bros

Unilever Offered a golden parachute to leave the company They accepted Had breached employment contract because they engaged with to Coco cartel This would have given them the right to terminate their employment No common mistake the terms of the contract were not essentially different

Graves v Graves

Was not impossible but radically different and thereby illustrating the test are not always the same Policy decision

Common Mistake

a situation in which both parties believe the same misunderstanding or mistake about the contract nullifies consent

Griffith v Bryner

commerical impossibility, Hotel room booked to watch coronation procession Procession was cancelled Common mistake as purpose for contract Not impossible to perform, but pointless.

Nicholson and Venn v Smith-Marriott

essential difference of napkins, different time period - not what was claimed (didn't cause impossibility) Georgian tablecloths thought to be property of Charles I Breach of contract Essentially different Maybe not a good example because lord denning said in obiter that he disagreed in solle v butcher

Scriven Bros. & Co v Hindley

mutual mistake, buyer and seller were mistaken as to tow and hemp

mistake cases

narrow doctrine with little chance of remedy

Kyle Bay ltd v Underwriters

nightclub fire Wrong policy Compromise agreement Turns out it was the right policy Claim for mistake Did not make the agreement impossible And the quality was not essentially or radically different Two approaches are essentially the same thing

McRae v Commonwealth Disposals Commission

res extincta, but the commission implicitly took responsibility for the tankers existing

Centrovincial Estates v Merchant Investors Assurance

sometimes it is hard to establish if action was snapping up a mistake; rent review clause

Brennan v Bolt Burdon

there can be mistakes of law

Unilateral Mistake

A mistake that occurs when one party to a contract is mistaken as to a material fact. negative consent

Golden Ocean Group

Arbitration clause Common mistake that the incorrect company was linked to it Whether implied clause that Genuine was the actual party intended in the clause For a common mistake to make a contract void it needs to be fundamental and make the contract essentially different from what was to be. Mistakes to quality do not make performance impossible.

Tamplin v James

Baggallay LJ [W]‌here there has been no misrepresentation, and where there is no ambiguity in the terms of the contract, the defendant cannot be allowed to evade the performance of it by the simple statement that he has made a mistake. Were such to be the law the performance of a contract could rarely be enforced upon an unwilling party who was also unscrupulous. -plans did not include a garden in the sale of the brewery