Mistake Flashcards
(15 cards)
If a contract is affected by an ‘operative’ mistake, the contract is
void
Void
the contract has no legal effect from the outset
Common mistake
requires the same mistake to have been made by both the parties, usually concerning the existence or identity of the subject matter of the contract
When will common mistake render the contract void?
common mistake as to the existence of the subject matter
When will common mistake NOT render the contract void?
common mistake as to a fact/quality fundamental to the agreement (eg value of an artwork) does not void the contract; will only be void in the most severe instances of mistake
in a scenario where one of the parties is mistaken because he has been careless or reckless (Tamplin v James), rather than because of ambiguity/misrepresentation, who will be at fault?
the party at fault will be bound by the agreement
test for mutual mistake
test of reasonableness: would a reasonable person have taken the agreement to mean what the parties thought it meant?
unilateral mistake
where only one party is mistaken and the other party knows, or is deemed to know, of the mistake
unilateral mistake renders a contract
void
to rely on unilateral mistake, the mistaken party must provide evidence to satisfy what 3 following conditions?
- the other party was aware, or should have been aware of the first party’s mistake at the time the contract was made
- the mistake was in respect of a term that induced the first party to enter into the contract, not a collateral matter (a term not mentioned in the contract)
- the mistaken party was not at fault – e.g. if the mistaken party is careless/negligent in reaching his mistaken conclusion, he cannot rely on unilateral mistake
general rule under L’Estrange v Graucob
a person is bound by the terms of any instrument which they sign or seal even though they did not read it or did not understand its contents
Where a person signs a document or executes a deed under a mistaken belief as to the nature of the document, they may raise the defence of
non est factum (‘it is not my deed’)
A plea of non est factum may be available where the mistake was due to either:
a) the blindness, illiteracy, or senility of the person signing; or
b) a trick or fraudulent misrepresentation as to the nature of the document, provided that person took all reasonable precautions before signing.
If the contract is void for mistake, it is about
identity
If the contract is voidable for misrepresentation, it is about
attributes
