Law of Unilateral Mistake
RESEARCH ESSAY
Cases under the law of mistake can be divided into common, mutual and unilateral mistake; however this discussion is based on unilateral mistake, as Stephen Graw said:
“Operative unilateral mistake occurs when only one party in the contract is mistaken, the other party is or should be aware of that mistake and yet he purports to proceed with the agreement anyway.”
Cases under unilateral mistake can be divided into three categories: Firstly mistaken identity, secondly mistake as to the terms of a contract and thirdly mistake as to the nature of a document signed. The main focus in this discussion is mistaken identity, where one party is mistaken as to the identity of another. Mistaken identity may happen in two different ways, at a distance or face to face. Mistaken identity is mostly due fraudulent misrepresentation by one party to another. However, it may operate in a different way, for example, A made a contract with B, believing B to be C, and B knows or ought to know of A’s mistake and he does nothing to correct it.
The purpose is to give a clear explanation on why Lord Denning took the view that the two cases, Phillips v Brooks and Ingram v Little could not be reconciled and how the apparent conflict between these two cases was resolved by the decision in Lewis v Averay. This explanation will be given in four parts.
Mistaken identity under common law
Under the common law it is established that the effect of mistaken identity is that it makes a contract void from the start. However, the common law also presumes that courts will not easily declare a contract void on the basis of the mistake. But if the mistaken party succeeds in presenting to the court three things, the presumption maybe rebutted and the contract maybe declared void for mistake. Firstly, if he can prove that he took the identity of the person he is dealing with as of vital importance. Secondly, if he can prove that he only intended to deal with someone else. And thirdly, if he
Cases under the law of mistake can be divided into common, mutual and unilateral mistake; however this discussion is based on unilateral mistake, as Stephen Graw said:
“Operative unilateral mistake occurs when only one party in the contract is mistaken, the other party is or should be aware of that mistake and yet he purports to proceed with the agreement anyway.”
Cases under unilateral mistake can be divided into three categories: Firstly mistaken identity, secondly mistake as to the terms of a contract and thirdly mistake as to the nature of a document signed. The main focus in this discussion is mistaken identity, where one party is mistaken as to the identity of another. Mistaken identity may happen in two different ways, at a distance or face to face. Mistaken identity is mostly due fraudulent misrepresentation by one party to another. However, it may operate in a different way, for example, A made a contract with B, believing B to be C, and B knows or ought to know of A’s mistake and he does nothing to correct it.
The purpose is to give a clear explanation on why Lord Denning took the view that the two cases, Phillips v Brooks and Ingram v Little could not be reconciled and how the apparent conflict between these two cases was resolved by the decision in Lewis v Averay. This explanation will be given in four parts.
Mistaken identity under common law
Under the common law it is established that the effect of mistaken identity is that it makes a contract void from the start. However, the common law also presumes that courts will not easily declare a contract void on the basis of the mistake. But if the mistaken party succeeds in presenting to the court three things, the presumption maybe rebutted and the contract maybe declared void for mistake. Firstly, if he can prove that he took the identity of the person he is dealing with as of vital importance. Secondly, if he can prove that he only intended to deal with someone else. And thirdly, if he
Bibliography: Gibson, A. & Fraser, D. Business Law (5th ed, 2011) Graw, Stephen, An Introduction to the Law of Contract (6th ed, 2008) Khoury, D. & Yamouni, Y. Understanding Contract Law (7th ed, 2007) Journal Articles McLauchlan, D. ‘Mistake of identity and Contract Formation’ (2005) 21(1) Journal of Contract Law 1, (3 – 16) Case Law Boulton v Jones (1857) 157 ER 232 Cundy v Lindsay (1878) 3 App Cas 459 Ingram v Little (1961) 1 QB 31 King’s Norton Metal Co v Edridge, Merret & Co Ltd (1897) 14 TLR 98 Lewis v Averay (1972) 1 QB 198 Phillips v Brooks Ltd (1919) 2 KB 243 -------------------------------------------- [ 2 ]. Stephen Graw, An Introduction to the Law Contract (6th ed, 2008) 277. [ 3 ]. Stephen Graw, An Introduction to the Law Contract (6th ed, 2008) 277; D Khoury and Y Yamouni, Understanding Contract Law (7th ed, 2007) 313. [ 4 ]. JW Carter and DJ Harland, Contract Law in Australia (2nd ed, 1991) 385. [ 5 ]. A Gibson & D Fraser, Business Law (5th ed, 2011) 415. [ 7 ]. Stephen Graw, An Introduction to the Law Contract (6th ed, 2008) 277. [ 8 ]. D Khoury and Y Yamouni, Understanding Contract Law (7th ed, 2007) 313. [ 11 ]. JW Carter and DJ Harland, Contract Law in Australia (2nd ed, 1991) 382. [ 12 ]. (1857) 157 ER 232. [ 13 ]. A Gibson & D Fraser, Business Law (5th ed, 2011) 415. [ 14 ]. (1878) 3 App Cas 459. [ 15 ]. D Khoury and Y Yamouni, Understanding Contract Law (7th ed, 2007) 316. [ 16 ]. (1897) 14 TLR 98. [ 17 ]. Stephen Graw, An Introduction to the Law Contract (6th ed, 2008) 280. [ 18 ]. Lewis v Averay (1972) 1 QB 198. [ 19 ]. (1878) 3 App Cas 459. [ 20 ]. (1857) 157 ER 232. [ 21 ]. (1897) 14 TLR 98. [ 22 ]. (1919) 2 KB 243. [ 23 ]. D. W. McLauchlan, ‘Mistake of identity and Contract Formation’ (2005) 21(1) Journal of Contract Law 1, (6 - 9). [ 24 ]. (1961) 1 QB 31. [ 25 ]. D. W. McLauchlan, ‘Mistake of identity and Contract Formation’ (2005) 21(1) Journal of Contract Law 1, (9 - 13). [ 26 ]. Lewis v Averay (1972) 1 QB 198. [ 27 ]. Lewis v Averay (1972) 1 QB 198. [ 28 ]. Lewis v Averay (1972) 1 QB 198. [ 29 ]. (1972) 1 QB 198. [ 30 ]. D. W. McLauchlan, ‘Mistake of identity and Contract Formation’ (2005) 21(1) Journal of Contract Law 1, (13 - 16). [ 31 ]. Lewis v Averay (1972) 1 QB 198. [ 32 ]. Lewis v Averay (1972) 1 QB 198. [ 33 ]. Lewis v Averay (1972) 1 QB 198.