Mistake in English contract law

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The law of mistake comprises a group of separate rules in English contract law. If the law deems a mistake to be sufficiently grave, then a contract entered into on the grounds of the mistake may be void. A mistake is an incorrect understanding by one or more parties to a contract. There are essentially three types of mistakes in contract:

Contents

Common mistake

Res sua, where there is a mistake as to the title/name of an involved party (where the subject matter already belongs to oneself for example):

Res extincta, where the subject matter does not exist:

Mutual mistake

Unilateral mistake to identity

Mistake as to identity occurs when one party – usually deceived by a "rogue" – believes themselves to be bargaining with another, uninvolved, third party. [5] [6] In a typical situation of this kind, the contract will either be void for mistake, or voidable for fraud. Such a distinction depends on the manner in which the contract was made. There are two types: (1) Contract made inter absentes, when the parties do not meet face-to-face, e.g. through correspondence; and (2) Contract made inter praesentes—when the parties meet face-to-face [7] [8] One commentator states "'[t]here are few more vexed areas of contract law' than mistake of identity." [9] The English approach provides less protection to the purchaser from a rogue than American law. [10]

Inter absentes

A Contract made inter absentes occurs when the parties do not meet face-to-face, e.g. through correspondence. [11] [12]

Cases:

Inter praesentes

A contract made inter praesentes occurs when the parties meet face-to-face. Cases:

In a contract was made face to face, the court presumed that the seller intended to contract with the person in front of them, so the contract was not void for mistake to identity.

A rogue impersonating one Richard Greene, a popular actor, told the plaintiff who had advertised to the sale of his car and offered to buy it for the advertised price, 450 pounds. Subsequently, the rogue appended his signature that clearly displayed "R. A. Green" on a cheque which he presented to the seller; as a result, he was granted the chance of taking away the car. The cheque bounced and the buyer was indeed not Richard Green. He sold the car to one Averay, a third party who purchased the car in honesty. In an action brought against Averay for conversion, the Court of Appeal, following Phillips v. Brooks and disregarding Ingram v. Little held that despite his mistake, the plaintiff had completed a contract with the rogue.

Unilateral mistake as to terms

Non Est Factum

Rectification

See also

Notes

  1. ↑ Smith v Hughes [1871]
  2. ↑ Lewis v Averay [1971] 3 All ER 907
  3. ↑ Raffles v Wichelhaus (1864) 2 Hurl. & C. 906.
  4. ↑ Bell v Lever Brothers Ltd [1931] All ER 1, [1932] AC 161
  5. ↑ "Mistake Law | Contract Law". www.lawteacher.net. Archived from the original on 15 February 2015.
  6. ↑ "Contract: Mistake".
  7. ↑ "Mistake Law | Contract Law". www.lawteacher.net. Archived from the original on 15 February 2015.
  8. ↑ "Contract: Mistake".
  9. ↑ with reference: "MacMillan [2005] CLJ 711. See also Goodhart (1941) 57 LQR 228."
  10. ↑ "Archived copy" (PDF). Archived from the original (PDF) on 20 April 2017. Retrieved 19 April 2017.{{cite web}}: CS1 maint: archived copy as title (link)
  11. ↑ "Mistake Law | Contract Law". www.lawteacher.net. Archived from the original on 15 February 2015.
  12. ↑ "Contract: Mistake".
  13. ↑ "King's Norton Metal Co Ltd v Edridge Merrett and Co LTD: CA 1879". 27 November 2020.
  14. ↑ "Kings Norton v Edridge".
  15. ↑ [1961] 1 QB 31
  16. ↑ [2004] 1 AC 919

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References

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