Mistake

Question 1

Who can plead a mistake C or D?

Answer 1

• Both

Question 2

What does Vitiation of contracts deal with?

Answer 2

• situations where something has “gone wrong” at some stage in the formation of the contract and this renders the contract legally invalid.

Question 3

What are 4 vitiating factors?

Answer 3

• Mistake,
• Misrepresentation,
• Duress,
• Undue influence.

Question 4

What are the two types Vitiation?

Answer 4

• Voidness

- Voidability.

Question 5

What does Voidness vitiation mean?

Answer 5

• What we mean is that there never was, as a matter of law, a binding contract.
• It might seem that the requirements of formation have been met, but, actually, there has not, at any point in time, been a binding contract

Question 6

What does voidable vitiation mean?

Answer 6

• until avoided by the mistaken party, the contract remains perfectly valid and binding
• C has a right to elect to affirm or rescind the contract

Question 7

What happens if a mistaken party elects to rescind?

Answer 7

• The contract is wound up pro- and retrospectively
• I.e., all that has been given under the contract must be given back, and any future “obligations” cease to bind the parties, so it is then as if there was never any contract

Question 8

What happens if the elected party chooses to affirm?

Answer 8

• The contract is fully valid and binding.

Question 9

What 3 things could amount to a mistake?

Answer 9

1- The subject-matter is fundamentally different from the actual subject-matter?
2- His co-contractor is someone else, when the identity of his co-contract is fundamentally important to C?
3- The terms of the contract are different from the terms of the contract propounded by D?

Question 10

What is a mistake?

Answer 10

• A mistake is a belief that can be proved incorrect at the time of formation of the contract.
• It is not an opinion
• It must be provable (or disprovable, of course)
• And it must be provable (or disprovable) now
• It is not a mis-prediction, something that can only be proved wrong later

Question 11

What are the so-called ‘Coronation Cases’?

Answer 11

• Many owners of flats overlooking the planned procession route for the coronation of King Edward VII let rooms for viewing the procession
• Due to the King’s illness, the procession was postponed
• In most cases, the letting contracts had been made prior to the decision to postpone had been taken.
• Therefore, the “mistake” in these cases was not a mistake at all; it was a mis-prediction

Question 12

Griffith v. Brymer (1903)

Answer 12

• One of the coronation cases where the contract for letting was formed after the date was rescheduled so he made a genuine mistake thinking it was still due to occur on the same day
• If the “mistake” relates to something in the future, the issue is one of frustration, not mistake

Question 13

What happens when the mistake relates to to something in the future?

Answer 13

• It is an issue of frustration not mistake

Question 14

What is the similarity and link between frustration and mistake?

Answer 14

• Both a mistake and a frustrating event seriously affect the nature of the parties’ obligations.

Question 15

What happens as a result of frustration?

Answer 15

• frustration merely terminates the contract (so the contract was fully valid and binding up until the time of the frustrating event), because it does not happen until after the contract is made.

Question 16

What happens as a result of mistake?

Answer 16

• Mistake can render the contract void ab initio (so there never was a valid contract between the parties), because it existed at the time the parties apparently made the putative contract.

Question 17

What 3 effects can a mistake have?

Answer 17

• It can lead to vitiation (here, rendering the putative contract void ab initio);
• It can lead to rectification of a written document;
• It can be a discretionary ground for refusal of SP.

Question 18

What happens when a mistake renders a contract void?

Answer 18

• That is, it is as if there never was a contract between the parties.
• Any unperformed “obligations” under the contract cannot be enforced (because they never existed as a matter of law).
• And there must be restitution of any “obligations” that have been performed (because they never existed, as legally binding obligations, as a matter of law).

Question 19

What happens in terms of restitution of any “obligations” that have been performed after a contract is void?

Answer 19

• In the most obvious case, this will be giving back the specific property transferred.
• When we are dealing w/provision of services (which obviously cannot, once performed, be given back), we generally mean paying a reasonable price (as opposed to the contract price per se) for the services rendered.

Question 20

What two cases can be used to demonstrate Mistake as a Ground for Refusing Specific Performance?

Answer 20

• Webster v Cecil (1861)

- Tamplin v James (1880)

Question 21

Webster v Cecil (1861)

Answer 21

• C mistakenly offered to sell land to D for £1,150, intending to sell for £2,150
• No suggestion D knew of or in any way induced mistake (so no possibility C could claim putative contract void for ‘mistake as to terms’: see below)
• However, court REFUSED D’s application for SP on basis that C had clearly proved his mistake

Question 22

Tamplin v James (1880)

Answer 22

• C contracted, at auction, to purchase land from D
• C mistakenly believed two additional plots were included w/the land
• The plan attached to the auction particulars clearly showed that these two plots were not included
• When C discovered his mistake, he refused to perform
• D sought an order for SP, but C argued SP should be denied, because of his mistake
• The mistake rendered the contract extremely unfavourable to C
• Nonetheless, SP WAS GRANTED because C’s mistake was due to his own unreasonable behaviour in not properly inspecting the plans