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Doctrine Of Mistake Notes

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Unilateral Mistake In general


Smith v Hughes [1871]: o Cockburn CJ:
? As long as objectively the parties can have said to have agreed on the subject matter of the contract (e.g. parcel of good oats)

Then C not responsible for correcting D's self induced mistake, (parcel of oats are old oats when they are actually new oats) Exception 1: Where there is objectively a mistake as to terms Exception 2: Mistake as to identity of other party

In general, courts will void a contract if identity of the party is mistaken, not if just the attributes of that party are mistaken (e.g. solvency, social position) (this being merely voidable for misrepresentation)

Four contradictory factors "guide" the court on whether dealing with attribute (non-voidable) or identity (voidable): o Objectivity - X cannot accept an offer meant for Y
? Ingram v Little [1961]: C sold car to H only after H identified himself as PGMH living at an address C checked as accurate in phone book. H actually rogue and not PGMH, dishonoured cheque, sold to D, innocent party.

Sellers LJ: o The mere presence of an individual cannot be conclusive that an apparent bargain he may make is made with him.
? E.g. If he were disguised in appearance to represent someone else and the other party, deceived dealt with him on the basis but wouldn't have done if knew truth

then, there would be no contract established o But this is a question only answerable in each case by its own facts.
? Lewis v Averary [1972]:

Megaw LJ: o In this case, can't be said that L thought the identity of R was of vital importance to him
? He would have sold to anyone

Thus, contract is valid.


Moi: o Only where name represented is of vital importance to C (e.g. famous painter/ respected tradesman)
? Should the presumption that C intends to deal w/
person in front of him be rebutted and contract void
? Else, contract only voidable on notice per Lord Denning for any other mistake of identity/attributes.

o Written Contracts
? When contract is in writing, only parties named in document are parties to contract
? Cundy v Lindsay [1878]: A, a rogue, rented some rooms near famous firm of cloth dealers. Since trade name was similar to said firm, C dealt w/ A thru written correspondence on this basis. A sold on lace, and then did not pay C what was due.

Lord Hatherley: o C never thought they were dealing with A
? They corresponded with Blenkiron & Co sent all of their invoices addressed to Blenkiron & Co, believed they were contracting with and selling to said firm, not A. o Thus, A can never have had any chance of gaining title to pass on to anyone else.Shogun Finance v Hudson [2003]: X agreed a deal for sale to R on stolen driving licence of P. After credit check based on this identity, C, who had no contact with R, authorised X to sell car to whom R had represented self as (P). The next day, R sold the car to D, a good faith purchaser, whom C then sued after discovering the fraud

Lord Hobbhouse (maj): o The name written on the document is different from negotiations face to face
? there was no consensus ad idem, R having no honest belief or contractual intent whatsoever and the finance company believing that it was accepting an offer by P o R may have negotiated with X orally
? But as far as C was concerned, C was dealing with P

Lord Nicholls (dis): o Presence of writing does not give reason for any distinction from face-to-face cases
? Fact that A believes he is dealing with B when in fact B is C is not relevant. o What matters is whether A agreed to sell his goods to the person dealing with, not why he did so or under what name.
? The latter is relevant to remedy, not to formation of a contract

Lord Millet (dis): o Rule should be that while Y can't intercept and accept an offer made to someone else, whatever the medium of communication, a contract comes into existence if, on an objective appraisal of the facts,
? It can be said that a party's offer has been accepted by the person to whom it was addressed.

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