Unilateral Contract in UK Law

In determining the meaning of the language of a commercial contract, and unilateral contractual notices, the law therefore generally favours a commercially sensible construction. The reason for this approach is that a commercial construction is more likely to give effect to the intention of the parties. Words are therefore interpreted in the way in which a reasonable commercial person would construe them.

Although there has been some discussion in the authorities about the principles involved, there has hitherto been no real doubt that under English law a party to a contract may effectively give consent in the contract itself to a subsequent novation.

If the only real redress is damages, how can its measure or scope be affected according to whether the contract is regarded as still subsisting or as at an end? To preserve the bare contractual relationship is an empty formality. The difference is fundamental, for there is no legal substitute for voluntary performance.

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.

None of the cases he cites at paragraph 455 of his judgment is authority for the existence of that jurisdiction. If there is no such jurisdiction in the case of a common mistake, I fear I am unable to see how, in logic, one can devise a rationale for an equitable jurisdiction in the case of a unilateral mistake, at least where there has been no misrepresentation by the other party.

In all the various formulations of the relevant principle in the judgments in those cases, none of the members of the respective courts suggested that rectification can properly be granted on account of unilateral mistake unless the defendant had actual knowledgeof the existence of the plaintiff's mistake at the time when the contract was signed.

Generally, if a party to a contract claims that a written term does not accurately reflect what was agreed between the parties, the allegation is that there was a continuing common intention to agree another term, which intention was outwardly manifested but, because of a mistake (usually a common mistake of the parties, but it can be a unilateral one) the contract inaccurately recorded what was agreed. If such a case is made out, a court may grant rectification of a contract.