OCR A2 Law - The Law of Contract - Mistake (5)

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  • Created by: Majid
  • Created on: 09-05-13 19:47

Mistake (5)

Mistake and Equity: If a mistake is operative the contract is void. Lord Denning tried to create a middle ground whereby he rewrote contracts for parties to create justice. This done in "Solle v Butcher". However the approach was criticised and "The Great Peace Shipping Case" has abolished The Law of Equity in Mistake.

Rectification: Equity will intervene however to reflect what was said up until the contract was made.

CASE: "Craddock Bros v Hunt". In this case there was an oral agreement for the sale of a house 'excluding a yard'. HELD: The court rectified the written contract to give effect to their verbal agreement.

The Plea of Non Est Factum: This is a plea to state that a party is not bound what they have signed, however this conflicts with the legal principle that a party is bound by their signature "L'estrange v Graucob". However, a 2 tier test must be satisfied.CASE: "Saunders v Anglia Building Society". In this case Mrs. Gallie who had poor eyesight wanted to help her nephew financially and agreed to give him her house so long as she could stay in it for the rest of her life. The nephew however separated from his wife so he made his aunt sign over the house to him but she was actually signing it over to his friend (Lee). Lee obtained the money and disappeared. HELD: The Lords laid down a 3-tier test for Non Est Factum.

1st Tier ---> Must suffer from a 'defect' in education, knowledge or incapacity - This tier was satisfied as Mrs Gallie had poor eyesight. 2nd Tier ---> The document must be 'substantially different' to what was thought to be signed - This tier failed as the document wasn't different, and the house was still sold. 3rd Tier ---> 'Proper care' must be taken - This tier was also unsatisfied as she should have had her glasses fixed and agreed to have had it done anyway.

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