Mistake.

A contract may be void or voidable due to mistake. Mistake thakle contract breach hoi

Definition: Mistake is a difficult area of contract law. The reason being the English legal system did not
recognize and comprehensive theory on mistake and that is why the doctrine of mistake has Solely
relied on the precedent cases on mistakes. That is why mistake is often confused with
misrepresentation.

MISTKE:

TWO TYPE OF MISTAKE.

1.Common mistake another is;

three types:

Common mistake as to subject matter,

Common mistake as to tile.

Common mistake as to quality.

2.Cross-purpose mistake;

Bilateral/ mutual cross-purpose mistake.

Unilateral cross-purpose mistake-3 parts

a. As to mistake identity.

b. Face-to-face principle.

c. Over the terms of the contract.

Distinguished between mistake and misrepresentation.

Misrepresentation occurs when a person makes an untrue assertion of fact and that induces the other
party to enter into the contract. It is based on some one’s action whereas mistake occurs where some
one’s believe that fact was true when in fact it was not.

General elements required to establish presence of Mistake in a contract:

Objective principle.

The mistake must precede the contract.

Mistake can be fact or law.

Objective principle.

In contract law, when deciding whether or not there has been a mistake sufficient to make a contract
void, the court looks at the fact objectively. They do not ask what the parties themselves believe that
they were agreeing to (Smith v Hughes).

(Smith v Hughes).

Legal Case Summary

Smith v Hughes (1870) LR 6 QB 597

Contract – Mistake – Breach of Contract – buyer beware – Caveat Emptor

Facts of Smith v Hughes

The complainant, Mr Smith, was a farmer and the defendant, Mr Hughes, was a racehorse trainer. Mr
Smith brought Mr Hughes a sample of his oats and as a consequence of what he had seen, Mr Hughes
ordered 40-50 quarters of oats from Mr Smith, at a price of 34 shillings per quarter. To begin with, 16
quarters of oats were sent to Mr Hughes. When they arrived, he said that the oats were not what he had
thought they were. As he was a racehorse trainer and he needed old oats, as this was what the horses
had for their diet. The oats that were sent to Mr Hughes were green oats, the same type as the initial
sample. Mr Hughes refused to pay Mr Smith for the delivery and remaining order.

Issues in Smith v Hughes

Mr Smith argued that Mr Hughes had breached the contract as he had not paid for the delivery and
future oats to be delivered. The issue in this case was whether the contract could be avoided by Mr
Hughes, as Mr Smith had not delivered the type of oats he had expected.

Decision/Outcome of Smith v Hughes

It was held that there was a contract between Mr Smith and Mr Hughes and that it would not be
avoided. There had been no discussion between the parties regarding the delivery of old oats. An
objective test revealed that a reasonable person would expect the sale of good quality oats in a similar
contract, since there was no express discussion of old oats. The sample gave him the chance to inspect
the oats and this was an example of caveat emptor (buyer beware)- Caveat emptor.

The mistake must precede the contract. (Contract thakar somoy mistake valid hobe).
In order to make a contract void, a mistake must be made before the contract is completed or before
the limitation period of contract is over (Amalgamated Investment & Property Co Ltd v John Walker &
sons Ltd).

Mistake must induce the contract.

Mistake Nije party ke induce kortase contract Koran jhonno.

A mistake can only negate consent if it induced the mistaken party to enter into the contract. If a party
thinks there is a possibility that they may be mistaken, but takes the risk, or is indifferent about the
particular matter that, the validity of the contract will not be affected.

Mistake can be fact or law.

In the past, only mistake of facts could affect the validity of a contract. A mistake of law was not
sufficient. However, the House of Lords abolished this distinction in the case of Kleinthwort Benson Ltd v
Lincoln City Council.

Common mistake known as identical mistake /shared mistake /mutual mistake. \

Common mistake take place when both the parties are mistake about the same issue. For example, if A
buys painting from B which both partiers belief is made by Picasso but infect is a fake one then both a B
have made a common mistake. The principle on common mistake has developed the case of Bell v Lever
Bros. In order to commit common mistake in a contract a mistake must be fundamental and essentially
radical different the core concept of the original contract. If this is the case then a contract shall be
render as void because of common mistake.

Core concept of the contract.

Bell v Lever Bros

Fact: Mr. Bell was the managing director for five year of the company that was owed by liver Bros. Mr.
Bell had traded for personal profit during his employment. As a result, liber bros made an offer of
redundancy to Mr. Bell with 30 thousand pound as compensation. Follow by Mr. Bell filed a case against
liber brothers.

Judgement: The court held that the contract was not void as the mistake was not a fundamental and
essential part of the contract. The personal trading that had happened during the employment was not
related to the subject matter of the contract and was said to be minor error from Mr. Bell. That is why
no common mistake has taken place in this case.

The decision of Bell v Liber Brother was followed in the case of Nutt v Read (2000); Great peace shipping
Ltd.
Opposing case for the concept common Mistake/ Bell v lever Bros- Syborn corporation v Rochem.

Common mistake as to subject matter (Res extinct);

The courts find a fundamental mistake where there is a mistake about the presence/existence of subject
matter. This kind of mistake is usually concerning goods to be sold. For example, A wants to sell to B and
it is… discovered that the car had been destroyed by fire. Now the contract is no longer valid. Supporting
case: Scott v Coulson.

Exceptional case: Couturier v Hastie.

Fact; The case involves in a contract to buy corn which was supposed to be on a ship sailing to England
but the corn had already been solved by the captain of the ship to a nearby island because the corn had
begun to go off. This was because there was no refrigerator in the ship those days. As far as the contract
was concern, the corn had ceased to existed. The seller claimed that the buyer still had to pay.
Therefore, the buyer sued against the seller.

Decision: The House of Lords held that the buyer did not has to pay for the corn because the contract
was clearly assumed by both parties as goods supposed to exist but not as goods lost or cease to exist.
Here the court did not mention common mistake as to subject matter and that is why this case is treated
(stop) as an exception to the principle.