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Mistake Notes

GDL Law Notes > GDL Contract Law Notes

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A more recent version of these Mistake notes – written by Cambridge/Bpp/College Of Law students – is available here.

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Revision: Contract



"Operative mistake" (sufficient to render a contract void) is more than a mere understanding


It is a mistake of fact: either prevents the formation of a contract or which renders the contract something other than that which was intended


It makes the contract void and not just voidable


Operates only where the mistake existed at the time of contract formation - not where the mistake occurs subsequently (Amalgamated Investment)

Three Categories of Mistake:

1. Mutual: Both parties are mistake but in different ways. E.g.. I think I'm selling X some 'Coke' (the drink) - X believe he is buying some 'Coke' (the drug) - there is no contract because no agreement

2. Common: Both parties suffer the same misapprehension - offer and acceptance correspond (underlying agreement between the parties) - e.g. I agree to sell X some golf clubs - but overnight, unbeknown to either of us, they burn in a fire - we are both mistaken

3. Unilateral: Only one party is mistaken - e.g. one party knows the other has mistakenly mispriced a contract

Mutual mistake as to the identity of the subject matter


Smith v Hughes: the test for agreement is objective - if on the evidence, a reasonable man would infer the existence of a contract, then it will be binding on both parties (per Blackburn J)


But where there is a large degree of ambiguity (no discernible meaning can be found) - the contract will be void for mistake


Raffles v Wichelhaus- two ships with the same name - it was impossible to tell from the contract which ship the coal would be on

Common mistake as to the existence of the subject matter


If at the time of the contract and unbeknownst to the parties, the subject matter of the contract is not in existence (res extincta), there can be no contract


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