Mistake in English law

Mistake in English law is an English contract law doctrine which sets out the conditions on which a contract may become void. A mistake is an incorrect understanding by one or more parties to a contract and may be used as grounds to invalidate the agreement. Common law has identified three different types of mistake in contract: unilateral mistake, mutual mistake, and common mistake.
*A unilateral mistake is where only one party to a contract is mistaken as to the terms or subject-matter. The courts will uphold such a contract unless it was determined that the non-mistaken party was aware of the mistake and tried to take advantage of the mistake. [Smith v. Hughes [1871] ] It is also possible for a contract to be void if there was a mistake in the identity of the contracting party. An example is in "Lewis v. Avery" ["Lewis v. Avery" [1971] 3 All ER 907] where Lord Denning MR held that the contract can only be avoided if the plaintiff can show that, at the time of agreement, the plaintiff believed the other party's identity was of vital importance. A mere mistaken belief as to the credibility of the other party is not sufficient.
*A mutual mistake is when both parties of a contract are mistaken as to the terms. Each believes they are contracting to something different. The court usually tries to uphold such a mistake if a reasonable interpretation of the terms can be found. However, a contract based on a mutual mistake in judgement does not cause the contract to be voidable by the party that is adversely affected. See "Raffles v. Wichelhaus". ["Raffles v. Wichelhaus" (1864) 2 Hurl. & C. 906.]
*A common mistake is where both parties hold the same mistaken belief of the facts. This is demonstrated in the case of "Bell v. Lever Brothers Ltd.", ["Bell v. Lever Brothers Ltd." [1931] ALL E.R. Rep. 1, [1932] A.C. 161] which established that common mistake can only void a contract if the mistake of the subject-matter was sufficiently fundamental to render its identity different from what was contracted, making the performance of the contract impossible.

Common mistake

Common mistake at law

*"McRae v. Cwth Disposals Commission" (1951) 84 CLR 377
*"Bell v. Lever Bros" [1932] AC 161
*"Grist v. Bailey" [1967] Ch 532
*"Nicholson & Venn v. Smith-Marriot" (1947) 177 L.T. 189
*"Associated Japanese Bank (International) Ltd v. Credit du Nord" [1989] 1 WLR 255
*"Brennan v. Bolt Burdon" [2004] 3 WLR 1321

*"Galloway v Galloway"
*"Scott v Coulson"

"Res Sua", where the subject matter already belongs to oneself
*"Cooper v. Phibbs"

"Res Extincta", where subject matter does not exist
*"Couterior v. Hastie"

*Sale of Goods Act 1979, s.6

Common mistake in equity

*"Great Peace Shipping Ltd v. Tsavliris Salvage (International) Ltd" [2003] QB 679

Mutual mistake

*"Raffles v. Wichelhaus" (1864) 2 H & C906; 159 ER 375

Unilateral mistake to identity

*"Boulton v. Jones" (1857) 27 LJ Ex 117
*"Cundy v. Lindsay" [1878] 3 App Cas 459
*"Kings Norton Metal Co v Edridge Merrett & Co" (1897) 14 TLR 98
*"Phillips v. Brooks" [1919] 2 KB 243
*"Ingram v. Little" [1961] 1 QB 31
*"Lewis v. Averay" [1972] 1 QB 198
*"Shogun Finance Ltd v. Hudson" [2004] 1 AC 919

Unilateral Mistake as to Terms

*"Hartog v. Colin & Shields" [1939] 3 All E.R. 566
*"Smith v. Hughes" (1871) LR 6 QB 597
*"Solle v. Butcher" [1950] 1 KB 671
*"Clarion Ltd v. National Provident Institution" [2000] 1 WLR 1888

Non Est Factum

*"Saunders v. Anglia Building Society" ("Gallie v. Lee") [1971] AC 1004

Rectification

*"F.E. Rose (London) Ltd v. W.H. Pim & Co Ltd" [1953] 2 Q.B. 450

ee also

*English tort law

Notes