Mistake

Front 1

Smith v Hughes

Back 1

Unilateral mistake won't invalidate the contract if, viewed objectively, agreement was reached on those terms

Front 2

Harton v Colin & Shields

Back 2

One cannot take advantage of an offer he knows must have been mistaken, 'snapping up case'. if there is a mistake as to the terms of the contract, the mistake will have an effect

Front 3

Scriven v Hindley

Back 3

When it is impossible to say whether one or the other subject matter is being contracted for, the parties are at cross-purposes and the contract is void.

Front 4

Raffles v Wichelhaus

Back 4

In order to establish mutual mistake it has to be shown that there is such a degree of ambiguity that it is impossible on applying the objective test of a reasonable man, that the parties intended to be bound by one set of terms or the other.

Front 5

Cundy v Lindsay

Back 5

Where the parties deal by correspondence and

-one party is mistaken as to the identity, not the attributes, of the other and

-intends instead to deal with some identifiable third party, and

-the other knows this, then

-the contract will be void for mistake.

Front 6

King's Norton Metal v Edridge

Back 6

A contract cannot be void for mistake if an alias is used by the fraudster which does not belong to any identifiable third party --> mistake as to attribute and not identity

Front 7

Philips v Brooks

Back 7

Parties dealing face-to-face are presumed to want to deal with each other.

Front 8

Ingram v Little

Back 8

Similar facts to above but contract was found void. (initially wanted cash but relented)

Front 9

Lewis v Averay

Back 9

Ingram v Little was heavily criticised though not formally overruled; similar facts to Philips v Brooks and contract found only voidable

Front 10

Shogun Finance v Hudson

Back 10

Strong rebuttable presumption in face-to-face dealings following Philips v Brooks rule. Parol evidence rule operates for party to be estopped from bringing evidence to the contrary.

Lord Nicholls: Cundy should be overruled; the person who gets defrauded should bear more risk than the bona fide purchaser and it is absurd that a subsequent purchaser's rights should depend on the precise way in which the crook seeks to persuade the owner of his creditworthiness and permit him to take the goods away from him

Front 11

Bell v Lever Bros

Back 11

Courts can nullify a contract based on a commonly mistaken assumption but only if the mistake is sufficiently fundamental

Test 'both parties have necessarily accepted as essential element of the subject matter of the contract'

-Compensation agreements were not void as the common mistake related not to subject matter but to the quality of the employment contracts.

Front 12

Associated Japanese Bank v Credit du Nord

Back 12

Doctrine of mistake is narrow and only invoked in 'unexpected' or 'wholly exceptional' cases; one should first look at the contract to see if the risk of mistake has been dealt with, expressly or impliedly.

-Mistake in equity may be considered after that of common law mistake

Front 13

Courturier v Hastie

Back 13

Corn sold without parties knowing, contract void because of implied condition precedent that contract was capable of performance (Denning), but doesn't tell us whether the courts will imply such a precedent

-If at the time the contract is made, unknown to the parties, the subject matter of it does not exist, the contract will be void (mistake was not mentioned but case used total failure of consideration instead)

Front 14

McRae v Commonwealth Disposals Commission (Australian)

Back 14

oil tanker on Jourmand Reef off Papua did not exist, it was found that the Commission contracted that there was an oil tanker and so there was a contract-->damages entitled

Front 15

Diamond v British Columbia Thoroughbred Breeders' Society

Back 15

Mistake about the identity of horse did not amount to identity but quality

Front 16

Sheikh Brothers Ltd v Ochsner

Back 16

license to cut and grow sisal on land, but land was incapable of producing so much sisal throughout the term of the license

Front 17

Cooper v Phibbs

Back 17

Appellant agreed to take a lease of a salmon fishery which parties believed was the property of the respondents, but it turned out the appellant, as the tenant in tail, was the owner of the property

Front 18

Griffith v Brymer

Back 18

Contract for hiring a room to view the procession of Edward VII; procession cancelled due to sickness one hour before contract was concluded

Front 19

Leaf v International Galleries

Back 19

The sale of a picture could not be set aside on the ground of mistake if parties entered into the contract erroneously believing the picture to be a Constable

Front 20

Solle v Butcher

Back 20

Mistaken assumption that flat was free from rent control, when lease was to run for seven years at a rent of almost of twice of what was payable under legislation --> lease valid in law but voidable in equity

-equitable doctrine of mistake overturned by Great Peace

Front 21

Great Peace Shipping Ltd v Tsavliris Salvage (International) Ltd

Back 21

Test for common mistake:

a. common assumption as to existence of state of affairs

b. no warranty by either party it exists

c. its non-existence of state isn't attributable to either party's fault

d. its non-existence renders performance impossible

e. state of affairs may be the existence, or a vital attribute, of the consideration to be provided or circumstances which must subsist if performance is to be possible

Front 22

Solle v Butcher

Back 22

When parties are under a common misapprehension either as to facts or as to their relative and respective rights, provided that the misapprehension was fundamental, and that the party seeking to set it aside was not himself at fault, a contract is liable to be set aside in equity.

-The court had the power to set aside a contract which is valid at law 'whenever it is of the opinion that it is unconscientious for the other party to avail himself of the legal advantage which he had obtained'.