Mistake

  • Created by: huth0
  • Created on: 27-04-17 16:56
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  • Mistake
    • To be recognised at common law, a mistake must be operative. To be operative, the mistake must be fundamental and must exist at the time when the contract is formed
      • Amalgamated Investment and Property Co Ltd v John Walker and Sons Ltd 1976
      • A common mistake is where both parties make the same mistake
        • Mistake as to the existence of the subject matter. for this to be an operative mistake, the subject matter must have ceased to exist before the contract was made but this must be unknown to the parties
          • Couturier v Hastie 1856 - corn destroyed on ship
            • McRae v Commonwealth Disposals Commission 1951 - gov sell oil tanker did not exist
        • Mistake as to title/ownership - only relevant where there is no implied condition as to title and no warranty as to title and where title is fundamental to the contract
          • Cooper v Phibbs 1867 - lease for fishing right already owned
        • Mistake as to quality of subject matter. Generally a party cannot avoid a contract by arguing a mistake as to quality and this extends to the financial consequences of a mistake
          • Bell v Level Bros ltd 1932 - a mistake as to quality could be sufficiently fundamental to render the contract void
            • Great Peace Shipping Ltd v Tsvliris Salvage Ltd 2002
    • Mutual mistake will only make the contract void where it is impossible to use the objective test and say what the parties appear to have agreed to
      • Raffles v Wichelhaus 1864 - 2 ships called pearless but parties talking about different ships
    • A subjective test is used for a unilateral mistake because it will only make the contract void if one party makes a mistake which is fundamental and the other party is actually aware of that mistake
      • A unilateral mistake as to the terms of the contract is rarely argued successfully now
        • Hartog v Colin & sheilds 1939
      • A unilateral mistake as to the identity of the other party. The claimant must prove that they intended to deal with some other person and identity was of fundamental importance, the other party was aware and reasonable steps were taken to check identity
    • Dealings made in writing and at a distance assume that the innocent party is dealing with the person of whoms name was given
      • Cundy v Lindsay 1878 - rogue signed using different name but their address
    • Face-to-Face dealings presume that the owner of the goods intends to contract with the person in front of them
      • Philips v Brooks Ltd 1919 - Rogue used forged cheque giving fake identity and sold to TP
      • Ingram v Little 1961 - Rogue purchased car using forged cheque and fake identity. Ctt void for mistake as no agreement to sell until identity revealed
    • A mistake as to the nature of the document signed is rarely argued successfully because the claimant has to prove that he was not careless in signing it. E.g. Blindness, mental  infirmity or illiteracy
      • Saunders v Anglia Building Society 1971
    • Rectification deals with parties who reached an agreement but when it was reduced to writing, a mistake was made so that the writing does no reflect the actual agreement
      • Conditions: 1. The parties must have agreed on that particular point 2. That agreement must have continued unchanged up to the time that it was put into writing 3. The writing must fail to express what the parties agreed on that point
        • George Wimpey UK Ltd

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