Contract 6 - Mistake

Question 1

What is the effect of mistake?

Answer 1

Prevents a contract from taking legal effect - contract void from outset

Question 2

What are the 3 categories of mistake?

Answer 2

1. Common Mistake: both parties suffering from same mistake 😳😳
2. Mutual Mistake: both parties mistaken but about different things 😳/😳
3. Unilateral Mistake: 1 party mistaken and other knows 😳😏

Question 3

What are the requirements for common mistake?
😳😳

Answer 3

• Must be sufficiently fundamental to affect validity of contract 🌳

Will not operate where:
- one party is at fault; 😈
- contract makes provision for this issue 📝
(quality of goods does not void contract ⭐️📦 e.g. painting)

Question 4

What is the test for mutual mistake?
😳/😳

Answer 4

Objective 👀: What a reasonable 3rd party would believe the agreement to be, based on words and conduct of themselves. Only if a third party would think there was no discernible meaning will mistake apply .

Question 5

What are the rules regarding unilateral mistake?
😳😏

Answer 5

where only one party has made a mistake - e.g. buying 30g of something for £1 rather than 30kg for £1

Question 6

What are the rules regarding unilateral mistake of identity?
😳😏

Answer 6

• misrepresentation - Where seller intended to deal with person in front of them & that’s what happened, NOT void for mistake, voidable for misrepresentation 😳😐
• Mistake - Where seller can show that identity was of vital importance = VOID for mistake 😳🥸

Easier to show where not face to face as the mistake is then who they are contracting with rather than a person they are dealing with.

Question 7

What happens where a fraudulent buyer sells goods onto a 3rd party?

Answer 7

• misrepresentation- Where fraudster has voidable title, & title has not avoided at time of sale, 3rd party acquires good title where bought in good faith so C can’t take goods back 😳😐😇=😁
• mistake = void & ineffective from outset so 3rd party must return goods even if bought in good faith😳🥸😇=😭

Question 8

What is presumed where parties contract face to face?

Answer 8

Seller intended to deal with person in front of them - difficult to rebut