Mistake

CON.07 — Mistake (Contract, FLK1)

Mistake is narrow. Most cases that feel like "mistake" are really misrepresentation, frustration, or just a bad bargain. An operative mistake renders the contract void from the outset (no rights pass; relevant for third parties and title). Equity historically gave wider, more flexible relief, but that has been heavily cut back.

Categories

1. Common mistake — both parties share the same wrong belief.

• Res extincta: subject matter doesn't exist (Couturier v Hastie; now codified — Sale of Goods Act 1979 s.6).
• Res sua: buyer already owns what they're "buying" (Cooper v Phibbs).
• Mistake as to quality: very hard to rely on. Must make the thing essentially and radically different from what was contracted for (Bell v Lever Bros — golden-handshake paid to a man who could have been dismissed for free; held not void). Great Peace Shipping v Tsavliris confirms the Bell test and abolished the equitable jurisdiction to rescind for common mistake in Solle v Butcher. So there is no equitable common-mistake relief in England & Wales.

2. Mutual (cross-purposes) mistake — parties at cross-purposes; no consensus. Judged objectively: if a reasonable person could not identify the agreed terms, no contract (Raffles v Wichelhaus — two ships "Peerless").

3. Unilateral mistake — one party mistaken, other knows/induces it.

• Mistake as to terms: if A knows B is mistaken about a term, no contract (Hartog v Colin & Shields — hare skins priced per lb not per piece).
• Mistake as to identity: identity must be material and the offeror must intend to deal with a specific other person. Face-to-face dealings carry a strong presumption the seller intends to deal with the person physically present, so the contract is voidable for fraud, not void (Phillips v Brooks; Lewis v Averay; Shogun Finance v Hudson — written contract, no face-to-face dealing, so void). Voidable vs void is decisive for the innocent third-party buyer: title can pass before rescission if only voidable.

Common SBAQ traps

• Void (mistake) vs voidable (fraud/misrep) — drives whether a third party gets good title.
• Solle v Butcher equity is dead after Great Peace.
• Mistake as to quality/value rarely operative — a bad bargain isn't a mistake.
• Non est factum: very narrow — signer must be radically wrong about the document's nature and not careless (Saunders v Anglia BS).