REVIEWS
| Date | 01 March 1993 |
| DOI | http://doi.org/10.1111/j.1468-2230.1993.tb00964.x |
| Published date | 01 March 1993 |
Zhe Modern Law Review
[Vol.
56
REVIEWS
John Cumright,
Unequal Bargaining:
A
Study
of
Vitiating Factors in the
Formation
of
Contracts,
Oxford: Clarendon Press, 1991, xxvi
+
245
pp,
pb 512.95.
This book is a systematic study of one area of the traditional contract canon, vitiating
factors in the formation of contracts. In the Introduction, Cartwright argues that,
in the process and at the moment of contracting, the golden thread common to vitiating
factors is that ‘responsibility arises out of an inequality in the bargaining between
the parties.’
The book has two conceptual components. The first part considers formation
questions and includes unilateral mistake, incorporation and rectification. The second
part deals with inherent defects in the contract arising out of the circumstances
of
its formation. There
is
an
extended discussion of misrepresentation from a remedies-
driven perspective and, finally, Cartwright considers duress, undue influence and
abuse of bargaining position.
The highlight
of
Part
1
is
Cartwright’s contribution to overcoming the inaccessi-
bility of unilateral mistake by means of a simple yet liberating framework. He
provides an excellent analysis of
Smith
v
Hughes
(1 87
1)
LR
6
QB 597, from which
he extracts an approach where we should:
First consider whether the parties, say
A
and B, were
actually
in
agreement. If they were,
there is a contract on those agreed terms. But if
A
and
B
were
nor
in agreement about the
terms on which they intended to contract, then there only will be a contract if
(1)
a reasonable
man would have believed, and
(2)
A
did in fact believe that
B
was agreeing to
A’s
terms.
In that case, there will be a contract on
A’s
terms (p
8).
Cartwright rightly points out that unilateral mistake is an exception to contractual
objectivity; indeed, it is ‘inter-subjective.’ One must know what the seller understands
of the buyer’s intentions. Thus, a person who wishes
to
enforce a term in a contract,
or to have the contract the way she understood it, must show that she actually
(subjectively) believed
the
contract
to
contain such
a
term, as well as being objectively
reasonable in that belief. Within this framework, a whole range of cases becomes
comprehensible.
However, the question that should be answered, if we are dealing with unequal
bargaining, is why the hypothetical seller
A
is responsible to B only if he knows
or ought reasonably to have known that buyer B is mistaken as to the terms of the
contract, whereas
A
is not responsible to B, in law, if he knows that
B
has made
a
mistake as to the quality of the subject-matter of the contract. Both examples are
cases where there is
a
knowledge advantage in
A’s
favour and
a
deficit against B;
as such, they are bargaining unequally. Indeed, the qualitykerm dichotomy effec-
tively merges where the subject-matter is unique. The question cannot be suppressed:
it matters not whether different jurisdictions find that the vendor has more or less
responsibility to the buyer, but it is interesting that she has any at all. In other words,
the law requires some degree of reciprocity
interpurtes.
This level of responsibility
is dressed up
in
the
cases as ‘reasonableness’ via the requirement of inter-subjectivity.
Incorporation and
non
est fuctum
are brought within the purview of the principles
derived from
Smith
v
Hughes,
although unilateral rectification has yet fully to follow
the logic of this approach. Cartwright argues,
I
think rightly, that this area would
benefit from the clear-headed approach taken in
Elden
Rent-a-Cur
Co
v
Clendenning
266
0
The
Modern
Law Review Limited
1993
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