Lecture 13: Mistake
Recap:
Common v Mutual mistake
Mistake= erroneous belief or misunderstanding about a matter of fact (mistake of
fact)
Only mistake of law can be operative (effective) since concerns validity of contract
Unilateral Mistakes:
ONE party at time of contracting is very seriously mistaken about;
I) Terms of contract
If one party is mistaken as to terms of the contract AND the other party knows of
other’s mistake, then contract is void
For mistake to be operative, party’s mistake must be as to terms of contract
Smith v Hughes, 1871
Claimant told seller he would need old oats for feeding his horse
Seller remained silent and didn’t tell him of delivery about old oats
Since seller was aware of mistake; claimant brought action based on mistake AND
misrep.
Held: both claims failed, since silence doesn’t constitute misrep. And claim of
mistake failed about a term of contract but as to quality (old v new)
Hartog v Colin& Shields
Serious mistake on seller’s part: Instead of price per piece, said price per pound
Webster v Cecil, 1861
the defendant refused the claimant’s offer of £2000 for his land. He erroneously
made a counter offer, offering to sell the land for £1250 instead £2250, which was
accepted by the claimant. However, when the mistake was recovered, the claimant
ordered specific performance, which was refused by the court.
Remedies for terms:
Equity follows law- contract can be rescinded or courts can refuse specific
performance
II) Identity of the party
A) Inter absentes (not physically present)
Parties deal via correspondence and one party is mistaken as to identity (not
attributes) about other party and the other party knows the other is mistaken, then
contract is void for mistake
Cundy v Lindsay, 1878
A rogue named Blenkarn ordered goods in writing from Lindsay & Co. He gave his
address as "Blenkarn & Co, 37 Wood Street, Cheapside" and signed the letter in such
a way that the name appeared to be "Blenkiron & Co".
respectable firm known as Blenkiron & Sons which carried on business at 123 Wood
Street was well known to Lindsay.
Lindsay did not ascertain their correct address and dispatched the goods to
"Blenkiron & Co, 37 Wood Street, Cheapside." Blenkarn sold (to Cundy) some of the
goods to Cundy in the ordinary course of business before the fraud was discovered.
Recap:
Common v Mutual mistake
Mistake= erroneous belief or misunderstanding about a matter of fact (mistake of
fact)
Only mistake of law can be operative (effective) since concerns validity of contract
Unilateral Mistakes:
ONE party at time of contracting is very seriously mistaken about;
I) Terms of contract
If one party is mistaken as to terms of the contract AND the other party knows of
other’s mistake, then contract is void
For mistake to be operative, party’s mistake must be as to terms of contract
Smith v Hughes, 1871
Claimant told seller he would need old oats for feeding his horse
Seller remained silent and didn’t tell him of delivery about old oats
Since seller was aware of mistake; claimant brought action based on mistake AND
misrep.
Held: both claims failed, since silence doesn’t constitute misrep. And claim of
mistake failed about a term of contract but as to quality (old v new)
Hartog v Colin& Shields
Serious mistake on seller’s part: Instead of price per piece, said price per pound
Webster v Cecil, 1861
the defendant refused the claimant’s offer of £2000 for his land. He erroneously
made a counter offer, offering to sell the land for £1250 instead £2250, which was
accepted by the claimant. However, when the mistake was recovered, the claimant
ordered specific performance, which was refused by the court.
Remedies for terms:
Equity follows law- contract can be rescinded or courts can refuse specific
performance
II) Identity of the party
A) Inter absentes (not physically present)
Parties deal via correspondence and one party is mistaken as to identity (not
attributes) about other party and the other party knows the other is mistaken, then
contract is void for mistake
Cundy v Lindsay, 1878
A rogue named Blenkarn ordered goods in writing from Lindsay & Co. He gave his
address as "Blenkarn & Co, 37 Wood Street, Cheapside" and signed the letter in such
a way that the name appeared to be "Blenkiron & Co".
respectable firm known as Blenkiron & Sons which carried on business at 123 Wood
Street was well known to Lindsay.
Lindsay did not ascertain their correct address and dispatched the goods to
"Blenkiron & Co, 37 Wood Street, Cheapside." Blenkarn sold (to Cundy) some of the
goods to Cundy in the ordinary course of business before the fraud was discovered.
