Intro: The essay/problem/dilemma involves the Law on Mistake which is a Vitiating Factor (VF). A VF invalidates anotherwise perfectly formed contract. A Mistake is a false assumption and if a mistake is fundamental, operative or crucial the contract will be void. The basic position with regards to Mistake is that the courts have "very little sympathy" for people who make contracts and then claim for Mistake. This is because of the principle of "Caveat Emptor" (Buyer Beware).
CASE: "Bell v Lever Brothers". In this case £30,000 in compensation was paid to Bell by mistake and Lever Brothers sought to recover the £30,000. HELD: The Lords rejected the Lever Bro's claim as the mistake wasn't fundamental and the contract wasn't void which meant they couldn't recover the £30,000.
AO2: This can be harsh and unfair which is why the courts have recognised a Mistake can be void in 1 of 3 ways. These are "Common Mistake", "Mutual Mistake" and "Unilateral Mistake". For the contract to be void the Mistake must be operative/fundamental/crucial, otherwise the contract will continue.
1. Common Mistake: This is where parties are mistaken about the same thing i.e. usually the subject matter of the contract no longer exists.
CASE: "Couturier v Hastie". In this case there was a contract for a quantity of corn which both parties thought was on a ship but the captain already sold the cargo as it started to ferment. HELD: The contract was void and ... buyer didn't have to pay for the corn.CASE: "Scott v Coulson". In this case the parties were making a contract for the life insurance of Mr. Death who at the time of the contract died. HELD: Void for common mistake as both parties were mistaken about the same thing (that he was alive).
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