Mistake in Law - page 1
Keywords: Mistake Law cases terms high graded
By sammy14 on 30/06/2007
Level: Bachelor Honours Degree (BA, BEng, BSc etc)
Page Number: 1 of 5 pages: 1 2 3 4 5
‘At law, the effect of mistake is to make a contract void, but this rule is confined within very narrow limits. It is thought to be in the interests of commercial convenience that, in general, apparent contracts should be enforced.’ (Treitel G.H., The law of Contract, 11th ed., Sweet & Maxwell, 2003, p 286).
With reference to decided cases, discuss the circumstances in which an operative mistake will make a contract void.
An operative mistake is one which makes a contract void. In that it has to be ‘’fundamental to the making of the contract such that the contract was formed only as a result of the mistake.’’ A contracting party will, however, be bound if whatever his real intentions may be, he so conducts himself that a reasonable man would believe that he was assenting to the terms proposed by the other party. An objective test is, therefore, applied in determining whether a mistake is operative or not. As a consequence of this, there are certain circumstances where a mistake will be classed as operative.
One of the circumstances is when there is ambiguity in what is dealt with. For example, where one party intends to deal with one thing and the other party intends to deal with a different thing. Here both parties would be at such cross purposes that no agreement will be reached. There will be no consensus ad idem. Thus, the contract becomes void. An example of a case to illustrate this sort of situation is Raffles v Wilchelhaus . The mistake here was as to the subject matter, where one party sold to the other cotton from a vessel called Peerless but the other intended to buy cotton from another vessel also called Peerless. It was held that there was, in effect, no contract between the parties.
A similar case to that of Raffles v Wilchelhaus is Falk v Williams . Here both parties were negotiating two charter parties; one to carry shale from Sydney to Barcelona and the other to carry copra from Fiji to Barcelona. A telegram was sent by P’s agent intending to confirm the copra charter. The telegram was however ambiguous and was understood by D to mean the shale charter. It was held that there was no contract because the parties were at cross purposes.
Other than the ambiguity in the subject matter a mistake as to the existence of the subject matter can also
Last 5 comments…
There have been no comments posted for this article, but you need to register if you want to be the first!