12 Mistake
A contract which is well formed, but where one or both parties have made
some fundamental false assumption in forming it, is said to be made under
a mistake. This is not necessarily a situation where one party has gone out
of the way to mislead the other, but where a false assumption about the
goods or the situation is genuine.
A mistake may be made by either party during the formation of a contract
which is inconvenient but which in law does not affect the validity of
contract. However, other mistakes could be much more fundamental, and
could make the contract void. The cases where mistake has arisen can be
categorised in various ways, since the doctrine of mistake is a developing
one. Cheshire and Fifoot divide the cases into three main groups, and that is
the way they will be discussed here, with a fourth category added concerning
mistakes made which particularly relate to documents. The categories are:
- common mistake – where both parties are labouring under the same false
assumption - mutual mistake – sometimes known as shared mistake, where the parties
are at cross purposes - unilateral mistake – where only one party is mistaken and the other is
aware of this - mistake over documents.
Common mistake
Common mistake is where the parties are in agreement, but make
the same false assumption in forming a contract, so their contract is
based on a situation which is false.Which car did he
intend to sell?