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Chapter

Cover Contract Law Directions

8. Mistake  

Without assuming prior legal knowledge, books in the Directions series introduce and guide readers through key points of law and legal debate. Questions, diagrams and exercises help readers to engage fully with each subject and check their understanding as they progress. This chapter discusses the various ways of classifying mistakes including communication mistakes, mistakes of fact, common mistake and unilateral mistake. It then looks at the case law on mistaken identity and the distinctions between face-to-face and correspondence contracts. Finally, it looks at the restrictive rules on common mistake, including the difference between fundamental mistake and mistake as to quality, and their relationship with the doctrine of frustration and the demise of the category of equitable mistake.

Chapter

Cover Contract Law Directions

8. Mistake  

Without assuming prior legal knowledge, books in the Directions series introduce and guide readers through key points of law and legal debate. Questions, diagrams and exercises help readers to engage fully with each subject and check their understanding as they progress. This chapter discusses the various ways of classifying mistakes including communication mistakes, mistakes of fact, common mistake and unilateral mistake. It then looks at the case law on mistaken identity and the distinctions between face-to-face and correspondence contracts. Finally, it looks at the restrictive rules on common mistake, including the difference between fundamental mistake and mistake as to quality, and their relationship with the doctrine of frustration and the demise of the category of equitable mistake.

Chapter

Cover Anson's Law of Contract

8. Mistake  

Jack Beatson, Andrew Burrows, and John Cartwright

Mistake is one of the most difficult topics in the English law of contract. The principles have never been precisely settled, the decided cases are open to a number of varying interpretations. The position is complicated by the fact that there have been distinct changes in the attitude of the judges to the question of mistake during the last 150 years. This chapter examines the circumstances in which a contract will be held to be defective if one or both of the parties enter into it under some misapprehension or misunderstanding but would not have done so had they known the true position. The discussions cover categorizing mistakes, mistakes about contract terms, mistakes about the identity of the person to whom the contract is addressed, and mistakes of fact or law about the subject matter of the contract or the surrounding circumstances.

Book

Cover Contract Law Directions

Richard Taylor and Damian Taylor

Without assuming prior legal knowledge, books in the Directions series introduce and guide readers at undergraduate level through key points of law and legal debate. Questions, diagrams, and exercises help readers to engage fully with each subject and check their understanding as they progress. Contract Law Directions is a comprehensive guide, now in its eighth edition, to all aspects of contract law. It is structured in four parts. Part 1 looks at the creation of obligations. It considers agreement, intention to create legal regulations, and consideration and estoppel. Part 2 is about contents and borders and looks at positive terms, exemption clauses, and misrepresentation. Part 3 examines defects in terms of mistake, duress, undue influence, and unconscionable bargains. The final part explains finishing and enforcing obligations. It analyses frustration, damages, specific remedies, and privity and the interests of third parties.

Chapter

Cover Concentrate Questions and Answers Contract Law

8. Mistake  

The Concentrate Questions and Answers series offers the best preparation for tackling exam questions. Each book includes typical questions, answer plans and suggested answers, author commentary, and other features. This chapter discusses the three broad classifications of mistake: common, mutual and unilateral. In common mistake (sometimes confusingly referred to as mutual mistake) both parties share the same mistake about a fundamental fact of the contract. With mutual mistake the parties are at cross-purposes but neither realizes it. In unilateral mistake only one of the parties is mistaken and the other party either knows of the mistake or possibly is deemed to know.

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 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 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 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.

Book

Cover Koffman, Macdonald & Atkins' Law of Contract
Koffman, Macdonald & Atkins’ Law of Contract provides a clear, academically rigorous, account of the contract law which is written in a style which makes it highly accessible to university students new to legal study. It works from extensive consideration of the significant cases, to provide students with a firm grounding in the way the common law functions. There are chapters on formation, certainty, consideration, promissory estoppel, intention to create legal relations, express and implied terms, classification of terms, exemption clauses, the Unfair Contract Terms Act 1977, unfair terms in consumer contracts, mistake, misrepresentation, duress and undue influence, illegality, unconscionability, privity, performance and breach, frustration, damages, and specific enforcement, as well as companion website chapters on capacity and an outline of the law of restitution. Recent cases which are of particular note in this, the tenth edition, include the Supreme Court cases of: Wells v Devani (2019) on interpretation and implied terms, Pakistan International Airlines Corporation v Times Travel (UK) Limited (2021) on lawful act economic duress, Morris- Garner v One-Step (Support) Ltd (2019) and Triple Point Technology Inc v PTT Public Company Ltd (2021) on the law of damages, and Tillman v Egon Zehnder (2019) on illegality and severance, re-affirmed in the Court of Appeal ruling in Quantum Actuarial LLP v Quantum Advisory Ltd (2021). Further important Court of Appeal decisions include: TRW v Panasonic (2021) on ‘battle of the forms’, Ark Shipping v Silverburn Shipping (2019) on classification of terms, FSHC Holdings v GLAS Trust (2019) on the equitable remedy of rectification, considered within the chapter on the doctrine of mistake, and Classic Maritime Inc v Limbungan Makmur (2019) on the interpretation of force majeure clauses and the scope of the doctrine of frustration, issues which rapidly elevated in significance leading up to Brexit and upon the outbreak of the Covid-19 pandemic. Notable first instance decisions which have tested frustration in light of these events include Canary Wharf (BP4) T1 Ltd and others v European Medicines Agency (2019) in the context of Brexit, and Salam Air SAOC v Latam Airlines Group SA (2020) on the impact of Covid-19. Additional High Court rulings considered within this edition include Sheikh Tahnoon Bin Saeed Bin Shakhboot Al Nehayan v Ioannis Kent (2018) and Bates v Post Office Ltd (2019) on good faith, and Neocleous v Rees (2019) on electronic signatures coupled with the findings of the Law Commission Report on Electronic Execution of Documents (2019) Law Com No 386.

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 Cheshire, Fifoot, and Furmston's Law of Contract

8. Mistake  

M P Furmston

This chapter considers the circumstances in which a mistake by one or both parties may affect the validity of the contract, and discusses the two categories of case: (i) where agreement has been reached, but upon the basis of a common mistake; and (ii) where an apparent agreement is alleged to be vitiated by mutual or unilateral mistake. It also considers cases of documents mistakenly signed, that is, where a person is induced by the false statement of another to sign a written document containing a contract which is fundamentally different in character from that which he contemplated.

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.

Chapter

Cover Contract Law Concentrate

2. Agreement problems  

Each Concentrate revision guide is packed with essential information, key cases, revision tips, exam Q&As, and more. Concentrates show you what to expect in a law exam, what examiners are looking for, and how to achieve extra marks. This chapter focuses on issues which may prevent the parties from reaching agreement. Agreement problems generally affect the agreement by rendering it void. It is necessary, however, to distinguish a void contract from one which is merely voidable. If an apparent agreement is too uncertain in its terms (e.g. because it is vague or essential terms are missing), the courts will not enforce it because they will not construct a binding contract for the parties. An apparent agreement may be void where the parties entered into the agreement under a ‘fundamental’ mistake which the law recognizes as preventing the parties from ever reaching agreement.

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 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 Essential Cases: Contract Law

Great Peace Shipping Ltd v Tsavliris Salvage (International) Ltd [2002] EWCA Civ 1407  

Essential Cases: Contract Law provides a bridge between course textbooks and key case judgments. This case document summarizes the facts and decision in Great Peace Shipping Ltd v Tsavliris Salvage (International) Ltd [2002] EWCA Civ 1407. The document also includes supporting commentary from author Nicola Jackson.

Chapter

Cover Essential Cases: Contract Law 5e

Great Peace Shipping Ltd v Tsavliris Salvage (International) Ltd [2002] EWCA Civ 1407  

Essential Cases: Contract Law provides a bridge between course textbooks and key case judgments. This case document summarizes the facts and decision in Great Peace Shipping Ltd v Tsavliris Salvage (International) Ltd [2002] EWCA Civ 1407. The document also includes supporting commentary from author Nicola Jackson.

Chapter

Cover JC Smith's The Law of Contract

23. Common mistake: contracts void for failure of a basic contractual assumption  

This chapter examines contracts which were avoided because of the failure of a basic contractual assumption before the contract has been concluded. If a contract has been concluded based on a particular contractual assumption, then the failure of that assumption before the contract has been concluded means that the contract is void. This is because both parties have made a fundamental mistake about a basic assumption. A contract cannot be void due to a common mistake where the risk of an assumption failing has been allocated to one of the parties under the contract, or where the failure is attributable to the fault of one of the parties. Very few assumptions are held to be ‘basic’; the threshold is set at a very high level. The failure of the assumption must, at the very least, render performance of the contract fundamentally different from what was reasonably envisaged.