Topic 6: Impossibility
Impossibility
- When, if at all, should parties be released from a contract because it has
become more difficult or expensive to perform?
- Mistake as to existence of the subject matter e.g. selling a car which has
unknowingly been destroyed.
- Mistake as to title e.g. selling something which you don’t own.
- Mistake as to law e.g. we’ve got the law wrong
- Mistake as to quality e.g. selling a painting, believed to be real but is
actually fake.
Unilateral (one person mistaken) mistake: identity
- A criminal pretends to be Beckham. Persuades a jeweller to sell him an
expensive ring in exchange for a cheque in belief that he is Beckham.
Cheque is worthless, criminal sells ring to X. does X or the jeweller own the
ring?
Common mistake (both parties have made same error)
Initial impossibility. What if both parties assume a state of affairs that turns out
to be false, and that prevents or affects performance of the contract.
The doctrine of frustration/subsequent impossibility (where the event occurs
after the contract is made)
Contractual Allocation of Risk
What is the relationship between the express and implied terms of the contract
and the doctrine of common mistake?
Has either party promised that the circumstance in question will be true, or has
neither party undertaken that risk?
Courturier v Hastie (1856) 5 HL Cas 673
- Contract for the sale of a set portion of corn already at sea
- Unknown to either party, prior to the completion of the contract the corn
had already been sold due to its deteriorating condition. – no existence of
subject matter
- Buyer sued by seller for price
- Held: not liable to pay price
- No mention of ‘mistake’ in judgement. No reason given for outcome. Could
say always seller’s responsibility. Also consistent with there being a
common mistake.
S.6 Sale of Goods Act 1979
- “Where there is a contract for the sale of specific goods and the goods without
the knowledge of the seller have perished at the time when the contract is made,
the contract is void.”
- Default (applies unless contract says otherwise) or mandatory rule (applies
regardless)? Read as a default rule.
Impossibility
- When, if at all, should parties be released from a contract because it has
become more difficult or expensive to perform?
- Mistake as to existence of the subject matter e.g. selling a car which has
unknowingly been destroyed.
- Mistake as to title e.g. selling something which you don’t own.
- Mistake as to law e.g. we’ve got the law wrong
- Mistake as to quality e.g. selling a painting, believed to be real but is
actually fake.
Unilateral (one person mistaken) mistake: identity
- A criminal pretends to be Beckham. Persuades a jeweller to sell him an
expensive ring in exchange for a cheque in belief that he is Beckham.
Cheque is worthless, criminal sells ring to X. does X or the jeweller own the
ring?
Common mistake (both parties have made same error)
Initial impossibility. What if both parties assume a state of affairs that turns out
to be false, and that prevents or affects performance of the contract.
The doctrine of frustration/subsequent impossibility (where the event occurs
after the contract is made)
Contractual Allocation of Risk
What is the relationship between the express and implied terms of the contract
and the doctrine of common mistake?
Has either party promised that the circumstance in question will be true, or has
neither party undertaken that risk?
Courturier v Hastie (1856) 5 HL Cas 673
- Contract for the sale of a set portion of corn already at sea
- Unknown to either party, prior to the completion of the contract the corn
had already been sold due to its deteriorating condition. – no existence of
subject matter
- Buyer sued by seller for price
- Held: not liable to pay price
- No mention of ‘mistake’ in judgement. No reason given for outcome. Could
say always seller’s responsibility. Also consistent with there being a
common mistake.
S.6 Sale of Goods Act 1979
- “Where there is a contract for the sale of specific goods and the goods without
the knowledge of the seller have perished at the time when the contract is made,
the contract is void.”
- Default (applies unless contract says otherwise) or mandatory rule (applies
regardless)? Read as a default rule.
