Contract Mistakes in UK Law

Leading Cases
  • Bell v Lever Bros Ltd
    • House of Lords
    • 15 Dec 1931

    Corresponding to mistake as to the existence of the subject matter is mistake as to title in cases where unknown to the parties the buyer is already the owner of that which the seller purports to sell to him. To such a case Lord Westbury applied the principle that if parties contract under a mutual mistake and misapprehension as to their relative and respective rights the result is that the agreement is liable to be set aside as having proceeded upon a common mistake.

    A. would never have entered into the bargain if he had known the fact. They can be supported on the ground that it is of paramount importance that contracts should be observed: and that if parties honestly comply with the essentials of the formation of contratcs, i.e., agree in the same terms on the same subject matter, they are bound: and must rely on the stipulations of the contract for protection from the effect of facts unknown to them.

    "In the contemplation of both parties fundamental to the continued validity of the contract," "a foundation essential to its existence," "a fundamental reason for making it" are phrases found in the important judgment of Scrutton L.J. in the present case. Nothing is more dangerous than to allow oneself liberty to construct for the parties contracts which they have not in terms made by importing implications which would appear to make the contract more businesslike or more just.

  • Great Peace Shipping Ltd v Tsavliris Salvage (International) Ltd (Cape Providence)
    • Court of Appeal
    • 14 Oct 2002

    Mistakes have relevance in the law of contract in a number of different circumstances. They may prevent the mutuality of agreement that is necessary for the formation of a contract. It may be that each party mistakenly believes that he has entered into such a contract in circumstances where an objective appraisal of the facts reveals that no agreement has been reached as to the terms of the contract.

    (i) there must be a common assumption as to the existence of a state of affairs; (ii) there must be no warranty by either party that that state of affairs exists; (iii) the non-existence of the state of affairs must not be attributable to the fault of either party; (iv) the non-existence of the state of affairs must render performance of the contract impossible; (v) the state of affairs may be the existence, or a vital attribute, of the consideration to be provided or circumstances which must subsist if performance of the contractual adventure is to be possible.

  • Rose (F. E.) (London) v William H. Pim Jnr. & Company
    • Court of Appeal
    • 16 Jul 1953

    In order to got rectification, it is necessary to show that the parties were in complete agreement on the terms of their contract, but by an error wrote them down wrongly; and in this regard, in order to ascertain the terms of their contract, you do not look into the inner minds of the parties – into their intentions – any more than you do in the formation of any other contract.

  • Statoil ASA v Louis Dreyfus Energy Services L P
    • Queen's Bench Division (Commercial Court)
    • 29 Sep 2008

    The general rule at common law is that if one party has made a mistake as to the terms of the contract and that mistake is known to the other party, then the contract is not binding. The reasoning is that although the parties appear, objectively, to have agreed terms, it is clear that they are not in agreement. Some of the cases talk of such a contract being “void”, but I think it is clearer to say that there was never a contract at all.

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Books & Journal Articles
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Law Firm Commentaries
  • Mistakes in notices: useful guidance from the Court of Appeal
    • JD Supra United Kingdom
    • Hogan Lovells
    • March 02, 2020
    Earlier this month the Court of Appeal decided the case of Captain Nigel Crighton Pease v Jeffrey William Carter and Louise Mary Carter. The case concerned whether statutory notices of proceedings ...
    ......This decision made clear that minor defects in contractual notices will not necessarily invalidate a notice if a reasonable recipient “would not have been perplexed in any way by the minor error“. The ......
  • The Insurance Act 2015: What You Need To Know
    • Mondaq UK
    • February 25, 2015
    ...... The Act will affect policyholders who enter into insurance contracts wholly or mainly for the purposes of their trade, business or profession. ... contract clauses, which previously had the effect that innocent mistakes could constitute a breach of warranty and enable insurers to avoid the ......
  • Landlords And Tenants - Take Notice!
    • Mondaq UK
    • October 03, 2016
    ...... how to draft and serve a notice in accordance with the underlying contract or statute, otherwise there could be serious (and unwanted) repercussions. ...Courts construe notices strictly and are unlikely to excuse mistakes. The content of this article is intended to provide a general guide to ......
  • English Law – A Love Letter
    • Mondaq United Kingdom
    • July 22, 2014
    ...English law is frequently chosen as the governing law of the contract in international transactions, even though neither party to the agreement ... The ability of English law to correct mistakes by construction. Those who brand English law of contract interpretation ......
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