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Chapter

Cover JC Smith's The Law of Contract

14. Rectification  

Rectification is an equitable remedy through which the court can rectify, or correct, a mistake in a written contract. This chapter examines two principal forms of rectification: common mistake rectification and unilateral mistake rectification. Rectification for common mistake arises where both parties make the same mistake. This is the better-established form of rectification. However, in some circumstances rectification for unilateral mistake will be granted in situations where only one party is mistaken but the other party has acted unconscionably or dishonestly. A party seeking rectification will need convincing proof that a mistake has been made before the court will contemplate altering the language chosen in a formal, written document.

Chapter

Cover Essential Cases: Equity & Trusts

FSHC Group Holdings Ltd v GLAS Trust Corp [2019] EWCA Civ 1361, Court of Appeal  

Essential Cases: Equity & Trusts provides a bridge between course textbooks and key case judgments. This case document summarizes the facts and decision in FSHC Group Holdings Ltd v GLAS Trust Corp Ltd [2019] EWCA Civ 1361, Court of Appeal. The document also includes supporting commentary from author Derek Whayman.

Chapter

Cover Essential Cases: Equity & Trusts

FSHC Group Holdings Ltd v GLAS Trust Corp [2019] EWCA Civ 1361, Court of Appeal  

Essential Cases: Equity & Trusts provides a bridge between course textbooks and key case judgments. This case document summarizes the facts and decision in FSHC Group Holdings Ltd v GLAS Trust Corp Ltd [2019] EWCA Civ 1361, Court of Appeal. The document also includes supporting commentary from author Derek Whayman.

Chapter

Cover Complete Contract Law

17. Mistake  

This chapter assesses situations in which one or both parties enter into a contract on the basis of a mistake that is so serious that it negates their consent to a contract; or, it means they did not consent to the agreement in the first place. Following such an ‘operative’ mistake, the contract will be void from the start and therefore treated as though a valid contract never existed. The chapter then considers the law on mistake. It starts with mistakes that prevent the formation of an agreement. The most significant mistake of this type is known as a ‘unilateral mistake’, which is where one party appears to have entered the contract on the basis of a mistake. The next significant issue is known as ‘common mistake’, which is where, at the time of creating the contract, both parties appear to be making the same mistake about the existence of an essential state of affairs. Finally, the chapter addresses the related remedy of equitable rectification before finally turning to the highly exceptional defence of non est factum.

Chapter

Cover O'Sullivan & Hilliard's The Law of Contract

13. Common mistake and rectification  

Titles in the Core Text series take the reader straight to the heart of the subject, providing focused, concise, and reliable guides for students at all levels. This chapter examines the situation where both parties to a contract share a common mistake. It analyses several court cases indicating that certain sorts of mistake can render contracts void at the level of common law. It discusses the orthodox approach which asserts that there is a separate legal doctrine whereby certain sorts of common mistakes inevitably render a contract void; it also considers an alternative way of conceptualising common mistake cases, the construction approach, which argues that the effect of common mistake is ascertained by construing and interpreting the contract. This chapter also considers the scope of the equitable remedy of rectification for common and unilateral mistake, which gives the court the jurisdiction, in exceptional cases, to correct transcription mistakes in the parties’ written contractual document.

Chapter

Cover Koffman, Macdonald & Atkins' Law of Contract

12. Mistake  

This chapter deals with mistake. First it looks at mistake in relation to the agreement, exploring the relevance of the identity and attributes distinction and its application in case law including the important decision of the House of Lords in Shogun Finance Ltd v Hudson. The equitable jurisdiction of the courts permits a more flexible approach and this is explored. The equitable remedy of rectification and the implications of the decision in FSHC Holdings v GLAS Trust are also considered. Second, the chapter explores mistake relating to questions of performability, often referred to as common mistake. In a situation where both parties share the same misapprehension about an underlying fact, this could constitute a mistake as to the existence, or a mistake as to the quality, of the subject matter. The significance of the leading case of Great Peace Shipping Ltd and its influence on the scope of common mistake is dealt with. The possibility of a document being signed by mistake is also addressed.

Chapter

Cover Contract Law

16. Mistake  

This chapter examines the effects of a mistake on the validity of a contract. A mistake may prevent parties from reaching agreement. First, a court may decide that no contract has been concluded where one party knows that the other is labouring under a mistake in relation to the terms of the agreement and fails to inform that other party of the mistake. Secondly, it may conclude that the terms of the offer and acceptance suffer from a latent ambiguity such that the parties cannot be said to have reached agreement. The third case in which a mistake may prevent the formation of a contract is where there has been a mistake as to the identity of the party who is said to be a party to the contract. The discussion then turns to the leading cases on common mistake, mistake in equity, and rectification. The chapter concludes by considering the non est factum defence, which can be invoked by someone who, through no fault of his own, has no understanding of the document that he has signed.

Chapter

Cover Poole's Textbook on Contract Law

8. Mistake  

Robert Merkin, Séverine Saintier, and Jill Poole

Course-focused and comprehensive, Poole’s Textbook on Contract Law provides an accessible overview of the key areas on the law curriculum. This chapter focuses on the legal treatment of ‘mistake’. It considers mistakes that prevent agreement (mutual or cross-purposes mistakes and unilateral mistake as to terms, particularly identity mistakes). It also examines the remedy of rectification when the contract does not accurately reflect what the parties agreed. It also considers the defence of non est factum. It then considers mistakes that are presumed to nullify consent if both parties entered into the contract under the same fundamental mistake. The doctrine of common mistake in English law is designed to protect the interests of third parties and to ensure certainty in transactions. A fundamental common mistake arises in cases where there is true impossibility or failure of consideration; the contract is automatically void and any money or property involved has to be returned. Distinctions can arise depending upon whether the impossibility is initial (common mistake) or subsequent (frustration doctrine). Categories of common mistake at common law include mistake as to subject matter (res extincta) and mistake as to ownership (res sua). A mistake as to quality will rarely be sufficiently fundamental to render the contract void. This chapter also discusses Lord Denning’s attempts to introduce an equitable jurisdiction to set aside on terms in cases of mistakes as to quality. These were rejected in Great Peace Shipping Ltd v Tsavliris (International) Ltd meaning that there is no remedial flexibility in such instances.

Chapter

Cover Poole's Textbook on Contract Law

8. Mistake  

Robert Merkin KC, Séverine Saintier, and Jill Poole

Course-focused and comprehensive, Poole’s Textbook on Contract Law provides an accessible overview of the key areas of the law curriculum. This chapter focuses on the legal treatment of ‘mistake’. It considers mistakes that prevent agreement (mutual or cross-purposes mistakes and unilateral mistake as to terms, particularly identity mistakes). It also examines the remedy of rectification when the contract does not accurately reflect what the parties agreed. It also considers the defence of non est factum. It then considers mistakes that are presumed to nullify consent if both parties entered into the contract under the same fundamental mistake. The doctrine of common mistake in English law is designed to protect the interests of third parties and to ensure certainty in transactions. A fundamental common mistake arises in cases where there is true impossibility or failure of consideration; the contract is automatically void and any money or property involved has to be returned. Distinctions can arise depending upon whether the impossibility is initial (common mistake) or subsequent (frustration doctrine). Categories of common mistake at common law include mistake as to subject matter (res extincta) and mistake as to ownership (res sua). A mistake as to quality will rarely be sufficiently fundamental to render the contract void. This chapter also discusses Lord Denning’s attempts to introduce an equitable jurisdiction to set aside on terms in cases of mistakes as to quality. These were rejected in Great Peace Shipping Ltd v Tsavliris (International) Ltd meaning that there is no remedial flexibility in such instances.

Chapter

Cover Poole's Casebook on Contract Law

8. Mistake  

Robert Merkin and Séverine Saintier

Poole’s Casebook on Contract Law provides a comprehensive selection of case law that addresses all aspects of the subject encountered on undergraduate courses. This chapter considers the area of ‘mistake’. The law distinguishes between several types of mistake. Some mistakes (‘agreement mistakes’) prevent formation of an agreement. These mistakes are mutual mistakes (where the parties are at cross purposes) and unilateral mistakes (where one party is mistaken and the other knows or ought to know this, e.g. unilateral mistake as to identity). The chapter also looks at document mistakes and specifically rectification of a written document to reflect accurately what the parties in fact agreed, and the plea of non est factum (‘this is not my deed’). Finally, a contract having no contractual allocation of risk and made under the same mistaken assumption may be void for ‘common mistake’ if the mistake is so fundamental that it ‘nullifies’ consent. This is known as ‘initial impossibility’ because the impossibility already exists when the parties agree to the contract. This chapter deals with common mistake and initial impossibility, contractual risk allocation, and the theoretical basis for the doctrine of common mistake. It discusses categories of fundamental common mistake, including res extincta, and assesses the legal effects of mistakes as to quality made by both parties. The chapter concludes by considering the relationship between common mistake and frustration.

Chapter

Cover Poole's Casebook on Contract Law

8. Mistake  

Robert Merkin KC, Séverine Saintier, and Jill Poole

Poole’s Casebook on Contract Law provides a comprehensive selection of case law that addresses all aspects of the subject encountered on undergraduate courses. This chapter considers the area of ‘mistake’. The law distinguishes between several types of mistake. Some mistakes (‘agreement mistakes’) prevent formation of an agreement. These mistakes are common mistakes (where the parties are at cross-purposes) and unilateral mistakes (where one party is mistaken and the other knows or ought to know this, e.g. unilateral mistake as to identity). The chapter also looks at document mistakes and specifically rectification of a written document to reflect accurately what the parties in fact agreed, and the plea of non est factum (‘this is not my deed’). Finally, a contract having no contractual allocation of risk and made under the same mistaken assumption may be void for ‘common mistake’ if the mistake is so fundamental that it ‘nullifies’ consent. This is known as ‘initial impossibility’ because the impossibility already exists when the parties agree to the contract. This chapter deals with common mistake and initial impossibility, contractual risk allocation, and the theoretical basis for the doctrine of common mistake. It discusses categories of fundamental common mistake, including res extincta, and assesses the legal effects of mistakes as to quality made by both parties. The chapter concludes by considering the relationship between common mistake and frustration.