A.5.I. Vitiating Factors - Mistake

Question 1

Smith v Hughes

Answer 1

Objective PRINCIPLE. Wrong kind of oats sold: but the C was binding. The courts will look at the facts objectively: and any reasonable onlooker would conclude that the parties were in agreement on what was being sold

Question 2

Amalgamated investment v John Walker

Answer 2

Mistake must precede the C. Warehouse bought with aim to redevelop. Day after sale: building was listed. At the time of C: no operative mistake: C valid

Question 3

Kleinwort Benson v Lincoln CC

Answer 3

Council had to give money back on transaction found to be illegal. Remedy of restitution now available for mistakes of law as well as mistakes of fact

Question 4

Nurdin v Peacock

Answer 4

doesn’t matter the nature of the mistake of law made: only that a duty is exercised only because of the mistake. Followed Kleinwort.

Question 5

Deutsche Morgan v Inland Revenue

Answer 5

Kleinwort followed in overpayment of tax

Question 6

McRae v Commonwealth Disposals

Answer 6

sold the oil tanker but had information which should have told them it wasn’t there. C valid: damages allowed for breach. Mistake will not void contract where it’s the fault of one of the parties.

Question 7

William Sindall v Cambridgeshire CC

Answer 7

MISTAKE WON’T VOID IF RISK ALLOTTED TO ONE OF THE PARTIES. Land sold: sewer discovered underneath. Not void because C allotted incumbrances to purchaser.

Question 8

Bell v Lever Brothers

Answer 8

MISTAKE MUST BE FUNDAMENTAL: rendering the contract essentially and radically different from what was expected. Made an agreement to give up existing contract for a due sum. Turns out the existing contract was no longer valid: but neither party knew this. New agreement not voided: mistake must be fundamental and here the parties got what they bargained for.

Question 9

Nutt v Read

Answer 9

sold a chalet and rented a pitch. Neither knew: but can’t sell the one without the other. C was voided and money returned.

Question 10

Scott v Coulson

Answer 10

MISTAKE AS TO THE EXISTENCE OF THE SUBJECT MATTER. Insurance policy taken out for Mr. Death (who was already dead!) Contract voided.

Question 11

Couturier v Hastie

Answer 11

MISTAKE AS TO THE EXISTENCE OF THE SUBJECT MATTER. C to buy corn that had already been sold by the ship’s captain. C void. This circumstance is now in SGA 1979.

Question 12

Cooper v Phibbs

Answer 12

MISTAKE AS TO TITLE. Agreed to rent a fishery: but he already owned it. Void.

Question 13

Harrison & Jones v Bunten & Lancaster

Answer 13

MISTAKE AS TO QUALITY. In most cases: quality will not void a contract. Here the goods sold were of such low quality as to be of no use to buyer: but not void.

Question 14

Nicholson and Venn v Smith-Marriott

Answer 14

MISTAKE AS TO QUALITY. Sometimes: the the mustake of quality can be fundamental and void the contract. Bought a napkin said to be of Charles I: but it was Georgian. The mistake was fundamentl and C voided.

Question 15

Great Peace Shipping v Tsavliris Salvage

Answer 15

Abolition of common mistake in equity. Ship was hired for an escort: but was much farther than thought. They cancelled: but the other sued. Not fundamental enough a mistake to be void: as although the ship was farther than thought: could still have made it in time. Asserted there is no separate doctrine of common mistake in common law v equity.

Question 16

Sriven Bros v Hindley

Answer 16

Two lots for acution: one with hemp: the other with tow. He thought he was buying hemp: the other that he was selling hemp. No agreement: contract void.

Question 17

Shogun Finance v Hudson

Answer 17

Fraudster hired a car from Shogun and sold it to a 3rd under false name. C between frudster and finance company was void: so Hudson was liable to give it back - it wasn’t the fraudster’s to sell. It is a case of unilateral mistake involving mistaken identity: the finance company did not intend to contract with the fraudster: but with Mr. Patel: the assumed identity.

Question 18

Lewis v Averay

Answer 18

Face-to-face principle. Fraudster presumed himself as R. Green (famous actor) and bought a car: then resold it. It was held that the initial purchase was valid as it was the person who presented himself that was contracted with. Identity was not of fundamental importance: only that it was presumed a famous actor would be creditoworthy. A MISTAKE AS TO ATTRIBUTES: NOT IDENITYT: INSUFFICIENT TO VOID.

Question 19

Phillips v Brooks

Answer 19

fake name given to buy a ring: but in person. C valid.

Question 20

Ingram v Little

Answer 20

problematic case of the two elderly ladies selling in person to a fraudster. Held there was no C: but Shoguns seems to have amended this. Or it’s a strong rebuttable presumption.

Question 21

Cundy v Lindsay

Answer 21

Fraudster used a name very close to aknown company but documents had company name. Void

Question 22

King’s Norton v Edrige

Answer 22

Fraudster made up a fake company and pretended to be big. Contract valid: it was this fake company that the claimant intended to contract with. There was mistake on the attributes: not identity.

Question 23

Hartog v Colin

Answer 23

UNILATERAL MISTAKE OVER THE TERMS OF THE CONTRACT. Where one party knows the other party is mistaken as to the terms: the contract will be void. Here: he intended to sell skins by the piece: but listed per pound. Contract void because buyer knew this was a mistake.

Question 24

Centrovincial Estates v Merchant Investors

Answer 24

Unlike Hertog: the lower amount for rent offered on lease was valid because other party didn’t know it was a mistake.

Question 25

Saunders v Anglia Building

Answer 25

Non est factum. Where a person signs a document believing it to be something totally different the remedy is non est factu :(this is not my deed). 3 elements must be proved: 1. signature induced by trick or fraud: 2. fundamental mistake as to the nature of the C: 3. not careless in signing the C. Old lady signed document of the deed over erroneously: didn't read it. She mistook the legal effect: not the nature of the document. Contract was valid.

Question 26

Rose v Pim

Answer 26

RECTIFICATION. Asked to supply feveroled: was told by his supplier it was just horsebeans. Sued supplier when he was sued: but no rectification. He ordered horsebeans and that's what he received.

Question 27

Craddock Bros v Hunt

Answer 27

Oral agreement included the house but not the yard: written contract included C. It was recitified. PE rule does not apply in application for rectification.

Question 28

Chartbrook v Persimmon Homes

Answer 28

Courts interpreted teerms to give them commercial sense: but if this hand't been available: rectification would have been possible to amend residual payment that was written down as a mistake. Rectification only available where: 1. Partie had a common intention on the relevant terms that continued to exist after the contract was put down in writing. 2. the contract was put down in writing. 3. a mistake was made in the writing down so that the C didn't refelct the intention.

Question 29

Wimpey v VI Construction

Answer 29

RECTIFICATION ONLY RARELY AVAILABLE FOR UNILATERAL MISTAKE: but will be possible if the other party realised the other was mistake and dishonestly failed to tell them. Negotation a cluase for additional payments on land fur future profits - value of enhancements was in the drafts: but dropped in later version. No rectification: couldn't prove the other knew and he should have had more expertise in these matters.

Question 30

Criticism and reform

Answer 30

KB v Lincoln CC- remedy of restitution now available for both mistakes of fact and mistakes of law: great peace shipping - no equitable remedy of common mistake: shogun finance - refinement in law with regards to unilateral mistakes. Danger comes in a too-strict reading of an agreement: which risks causing injustic where mistakes have been made but the objective interpretation allows the courts to ignore this. Stricter approach has led to bigger role for misrepresentation: but its remedies are often inadequate for innoncent 3rd parties.