CHAR_A01.PDF, page 1-18 @ Normalize ( CHAR_A01.QXD )

there is a very strict approach here, as this would, even for a company, have
been a large amount of money to lose.
The point is perhaps more easily seen in the following case.

The criteria have been restated in the following more recent case.

The same test was used in William Sindall v Cambridgeshire County
Council (1994) where land was found to be worth less than its purchase
price and to contain sewers originally thought not to be there. The contract
was said not to be ‘essentially and radically different’ from the original, but
just worth less.

Mistake 189

Leaf v International Galleries (1950)

A painting was sold which was believed by both the buyer and seller to

be painted by Constable. In fact it was proved, some years later, to be a

good copy. The court held that the contract would not be void for

mistake, as the painting itself was the subject of the contract, and it did

exist. The mistake was merely over its value, or quality. The reasoning

seems quite logical, if it is considered what would happen if the situation

was reversed and the value had increased. However, applying the criteria

of Lord Atkin (above), it could also be argued that a copy of a painting

is not at all the same thing as the original, and that if this fact been known

at the time of sale, the contract would not have been formed at all.

Associated Japanese Bank Ltd v Credit du Nord (1988)

A guarantee was given over some gaming machines. The gaming

machines were found not to exist, so the guarantee was worthless and was

held void. This was not really res extincta, since the contract was over the

guarantee (which did exist, but was of no use), not over the gaming

machines (which did not exist). Lord Steyn said that the guarantee

concerning non-existent machines was ‘essentially different’ from a

guarantee concerning machines which both parties believed to exist.

If a person buys an item of old furniture in a street market which turns out

to be a valuable antique, should they return it to the seller? Should this be

the same if they pay a lot for what appears to be a Roman coin at a historical

site, and the coin is later proved to be a copy?