MISTAKE IN THE CONSTRUCTION OF CONTRACTS

Date01 July 1961
AuthorF. A. R. Bennion,P. S. Atiyah
Published date01 July 1961
DOIhttp://doi.org/10.1111/j.1468-2230.1961.tb02776.x
THE
MODERN
LAW
REVIEW
Volume
24
July
1961
No.
4
MISTAKE IN THE CONSTRUCTION
OF
CONTRACTS
THE
need for careful use of words in discussing mistake in the law
of contract
is
so
cibvious that we feel it necessary, in inflicting
on
the readers of this
Review
yet another article on the topic, to
provide ourselves (and them) with a short glossary showing the
meanings we attach to some of the terms about to be used. We
realise that these definitions are too compressed to be entirely
satisfactory but nevertheless feel that in a general discussion they
are a help to the achievement of greater precision.
An error common to both parties as to
some fundamental fact in a case where, the rules of offer and
acceptance being satisfied, a contract is otherwise achieved.
An error by one
or
both
parties as to some fundamental fact in a case where, the rules
of offer and acceptance being satisfied, a contract is otherwise
achieved. The terms of a contract as expressed by
the parties. The terms of
a
contract as expressed by
the parties plus the additional terms (if any) which the law
holds to be included and less any terms used by the parties
which the law holds to be excluded.
Implied term.
A
term of the total contract not expressed
by the parties.
Inoperative obligation.
An obligation under
a
literal con-
tract which, on the true interpretation of the total contract, is
not required to be carried out.
More will be said about these definitions in the following discus-
Meanwhile we would say that our main object is to add our
Common mistake.
Mistake as to subject-matter.
Literal contract.
Total contract.
sion.
Vor..
24
421
16
422
TEE
MODERN
LAW
REVIEW
Vor..
24
voice to those that have been raised to urge that mistake should
no
longer be treated by textbook writers as a separate category of
the law
of
contract,
and
to explore some of the consequences
of
dealing with mistake as to subject-matter by arriving at and then
applying the total contract. We treat the total contract as
including implied terms whether these are taken to be included by
reference to the presumed intention of the parties
or
by the opera-
tion of a rule of We refer to mistake as to subject-matter
rather than common mistake because we believe the latter term to
be unsatisfactory in stressing a factor which may well be irrelevant,
since the parties have
ex hypothesi
reached agreement and complied
with the rules
of
offer and acceptance.
In
these circumstances,
where the court has the task of arriving at and then applying
so
much of the total contract as applies to the matters in dispute, its
approach is the same whether both parties were mistaken
or
only
one. This is illustrated by
Harrison
&$
Jones
v.
Bunten
&$
Lan-
caster
8-a case to which we will return later-where the contract
concerned a sale by description of Calcutta kapok,
Sree
brand,
both parties believing
it
to be free from cotton when
it
was not.
Pilcher
J.
said
*:
‘‘
Ryder
v.
Woodley
seems to show that in this type of case
a mistaken belief by the buyer as to the nature and quality of
the goods bought by description is immaterial, provided that
goods which answered the description were delivered.
It
is not‘
easy in principle to see why the fact that the sellers also shared
the mistaken belief should be material.”
The learned judge went
on
to say
firmly
that, where the buyer was
mistaken in a‘case of this kind, he could see no reason
why the
fact that the seller may entertain the same unexpressed but errone-
ous belief should have any relevance when the rights of the parties
come to be considered.” This applies also where the contract relates
to a specific object,
for
example, the new oats in
Smith
V.
Hughes.O
If,
from an objective standpoint, the buyer did not misunderstand
the offer and
if
the seller did not have actual knowledge of
a
subjective misunderstanding
of
the offer by the buyer (in either of
which cases the mistake would fall within the realm of offer and
acceptance
‘)
the question of whether the buyer’s mistaken belief
that the oats were old was
or
was not shared by the seller would
1
e.g.,
C.
J.
Blade,
‘*
The
Myth
of
Mietake
in
the English law
of
Contract
(1964)
70
L.Q.R.
985.
Mr. Blade’s words eeem
to
have fallen
on
deaf ears:
the
new
edition8
of
the two leeding textbooks, Cheehire
&
Fifoot
and
Anson,
each have a eeparate chapter
on
mietske.
Cj.
Atiyah,
An Introduction
to
the
Law
of
Contract
(Oxford, 1961).
2
For a diecueeion
of
the principle8 which
guide
the murte in arriving at the
total contract in commercial cseee not affected by mistake, see Fridman (1960)
76
L.Q.R.
521.
8
[1953] 1
Q.B.
646.
4
At
p.
666.
5
At
p.
660.
0
(1871)
L.R.
6
Q.B.
697.
1
On
the underetanding that we treat the requirement
of
certainty
as
part
of
the
rules
of
offer and acceptance.
On
this see below.

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