Where there is some ‘extra’ factor the contract may be allowed to continue,
as in the following case.
Unilateral mistake
Unilateral mistake is where only one party has contracted on the basis
of a false assumption. The other party will normally know of this
mistake, and in some cases will have encouraged it, or even planned it.Mistake over quality of subject matter
The courts again take the view that merely being mistaken over the quality or
value of the goods is not fundamental enough to avoid the contract. This was
one argument raised in Smith v Hughes (see Chapter 1, p. 2) where the court
said that even if the seller knew that the buyer was mistaken over the quality
of the oats which he bought, this would not make the contract void. On the
other hand, in Scriven v Hindley (1913) the court held void a contract where
a buyer at an auction had paid a very high price for a consignment of a fibre
called tow, believing it to be hemp, which was more valuable.
Taking this a step further, some mistakes may be so fundamental and
obvious that one party will be taken to have known about the mistake of the
other. In Hartog v Colin and Shields (1939) a mistake over the price of hare
skins was found to be so obvious and fundamental to a buyer who was
familiar with the market that he was deemed to have been aware of it, the
contract being held void.
Mistake as to identity
This is an aspect of unilateral mistake, and in many cases has occurred when
one person has posed as someone else in order to persuade a seller to part
Mistake 191been intended to be the subject of the contract, so the court held it too
ambiguous to enforce.Wood v Scarth (1858)
A lease was drawn up concerning a pub, and after a conversation with
the seller’s clerk the buyer accepted, believing the only payment to be the
rental of £63. The seller had also intended a premium of £500 to be paid.
Here the contract was upheld on the buyer’s terms, because of the ‘extra’
evidence of the statements of the clerk which had misled the buyer.