Mistake in English law - AbsoluteAstronomy.com

Contract law

Mistakes are a group of rules in English contract law

English contract law

English contract law is a body of law regulating contracts in England and Wales. With its roots in the lex mercatoria and the activism of the judiciary during the industrial revolution, it shares a heritage with countries across the Commonwealth , and the United States...

, which happen to share the same name. If the law deems a mistake to be sufficiently grave, then a contract entered into on the grounds of the mistake may be void

Void (law)

In law, void means of no legal effect. An action, document or transaction which is void is of no legal effect whatsoever: an absolute nullity - the law treats it as if it had never existed or happened....

. A mistake

Mistake (contract law)

In contract law, a mistake is an erroneous belief, at contracting, that certain facts are true. It can be argued as a defence, and if raised successfully can lead to the agreement in question being found void ab initio or voidable, or alternatively an equitable remedy may be provided by the courts...

is an incorrect understanding

Understanding

Understanding is a psychological process related to an abstract or physical object, such as a person, situation, or message whereby one is able to think about it and use concepts to deal adequately with that object....

by one or more parties to a contract. There are essentially three types of mistakes in contract,

unilateral mistake is where only one party to a contract is mistaken as to the terms or subject-matter. The courts will uphold such a contract unless it was determined that the non-mistaken party was aware of the mistake and tried to take advantage of the mistake. It is also possible for a contract to be void if there was a mistake in the identity of the contracting party. An example is in Lewis v Averay where Lord Denning MR held that the contract can only be avoided if the plaintiff can show that, at the time of agreement, the plaintiff believed the other party's identity was of vital importance. A mere mistaken belief as to the credibility of the other party is not sufficient.
mutual mistake is when both parties of a contract are mistaken as to the terms. Each believes they are contracting to something different. The court usually tries to uphold such a mistake if a reasonable interpretation of the terms can be found. However, a contract based on a mutual mistake in judgement does not cause the contract to be voidable
Voidable
In law, a transaction or action which is voidable is valid, but may be annulled by one of the parties to the transaction. Voidable is usually used in distinction to void ab initio and unenforceable....

by the party that is adversely affected. See Raffles v Wichelhaus.
common mistake is where both parties hold the same mistaken belief of the facts. This is demonstrated in the case of Bell v Lever Brothers Ltd, which established that common mistake can only void a contract if the mistake of the subject-matter was sufficiently fundamental to render its identity different from what was contracted, making the performance of the contract impossible. This is similar to frustration
Frustration in English law
Frustration in English law is an English contract law doctrine, which acts as a device to set aside contracts where an unforeseen event either renders contractual obligations impossible, or radically changes the party's principal purpose for entering into the contract...

, except that the event precedes, rather than follows the time of agreement.

Common mistake

McRae v Commonwealth Disposals Commission
McRae v Commonwealth Disposals Commission
McRae v Commonwealth Disposals Commission [1951] is an Australian contract law case, relevant for English contract law, concerning the common mistake about the possibility of performing an agreement.-Facts:...

(1951) 84 CLR 377
Bell v Lever Bros [1932] AC 161
Grist v Bailey [1967] Ch 532
Nicholson & Venn v Smith-Marriot (1947) 177 L.T. 189
Associated Japanese Bank (International) Ltd v Credit du Nord [1989] 1 WLR 255
Brennan v Bolt Burdon [2004] 3 WLR 1321

Galloway v Galloway
Scott v Coulson

Res Sua, where the subject matter already belongs to oneself

Cooper v Phibbs

Res Extincta, where subject matter does not exist

Couterior v Hastie

Sale of Goods Act 1979
Sale of Goods Act 1979
The Sale of Goods Act 1979 is an Act of the Parliament of the United Kingdom which regulates English contract law and UK commercial law in respect of goods that are sold and bought. The Act consolidates the original Sale of Goods Act 1893 and subsequent legislation, which in turn had codified and...

s 6

Great Peace Shipping Ltd v Tsavliris Salvage (International) Ltd
Great Peace Shipping Ltd v Tsavliris Salvage (International) Ltd
Great Peace Shipping Ltd v Tsavliris Salvage Ltd [2002] is an English contract law case, concerning the frustration of an agreement.-Facts:...

[2003] QB 679

Unilateral mistake to identity

Mistake as to identity occurs when one party - usually fraudulently - believes themselves to be bargaining with another, uninvolved, third party. In a typical situation of this kind, the contract will either be void for mistake, or voidable for fraud. Such a distinction depends on the manner in which the contract was made. Cundy v Lindsay
Cundy v Lindsay
Cundy v Lindsay LR 3 App Cas 459 is an English contract law case on the subject of mistake, introducing the concept that contracts could be automatically void for mistake to identity, where it is of crucial importance...

demonstrates this principle; here, a firm contracted by post to sell handkerchiefs to a rogue, masquerading as a legitimate company, Blenkiron & Co. The contract was held to be void for mistake: Lindsay & Co were able to recover the goods from a third party who had purchased them from the rogue (as the rogue did not have good title (property)

Title (property)

Title is a legal term for a bundle of rights in a piece of property in which a party may own either a legal interest or an equitable interest. The rights in the bundle may be separated and held by different parties. It may also refer to a formal document that serves as evidence of ownership...

to pass on to them). This can be contrasted with the case of King's Norton Metal Co v Edridge Merrett & Co, where a similar situation occurred. Here however, the company name that the rogue used did not exist; as in Cundy v Lindsay, Kings Norton Metal Co could not claim they relied upon the false company name to contract. Therefore the contract was merely voidable for fraud, and the third party obtained good title to the goods.

A further distinction which can be drawn is where a contract is made face to face; that is, generally, in shops

Retailing

Retail consists of the sale of physical goods or merchandise from a fixed location, such as a department store, boutique or kiosk, or by mail, in small or individual lots for direct consumption by the purchaser. Retailing may include subordinated services, such as delivery. Purchasers may be...

and markets. Where a contract is concluded this way, there is a strong presumption inferred by the courts that the seller intends to contract with the person in front of them. Thus in this situation it is much harder for the seller to claim a contract is void for mistake to identity. The principle is well demonstrated in the famous case of Phillips v Brooks. However, the law becomes somewhat convoluted and less certain when considering subsequent decisions, such as Ingram v Little. The principle has recently been upheld (albeit by a small margin of 3 to 2) in the House of Lords

House of Lords

The House of Lords is the upper house of the Parliament of the United Kingdom. Like the House of Commons, it meets in the Palace of Westminster....

decision of Shogun Finance Ltd v Hudson
Shogun Finance Ltd v Hudson
Shogun Finance Ltd v Hudson [2003] is an English contract law decided in the House of Lords, on the subject of mistaken identity as a basis for rescission of a contract. The case has been the subject of much criticism in failing to effectively clarify the area of mistake to identity.-Facts:A rogue...

, despite persuasive reasoning to abandon it. The current situation can be seen as less than ideal, as it is the third party buyer who loses out when contracts are considered void for mistake to identity. In Shogun Finance Ltd v Hudson the minority of Lord Nicholls and Lord Millett argued strongly that all mistakes for identity merely render a contract voidable.

Unilateral mistake as to terms

Hartog v Colin & Shields [1939] 3 All E.R. 566
Smith v Hughes (1871) LR 6 QB 597
Solle v Butcher [1950] 1 KB 671
Clarion Ltd v National Provident Institution [2000] 1 WLR 1888

Mistake of fact

Mistake of fact may be a defence in criminal law if is genuine, whether or not it is reasonable.

In DPP v Morgan and others an RAF man told three officers to have sex with his wife, and she would pretend to refuse just to be stimulating. They pleaded mistake, and the jury did not believe them.

In R v Williams (Gladstone)

R v Williams (Gladstone)

Williams was a case heard in the UK Court of Appeal in 1983 and established that a mistake of fact can be a successful defence regardless of whether the belief is reasonable or not.-Facts:...

, the facts were, according to Lord Lane, as follows:
Mr Williams was prosecuted for assault occasioning actual bodily harm. In delivering the judgement of the Court of Appeal, Lord Lane said:
An exception to this appears to be bigamy (see R v Tolson (1889) 23 QBD 168).

The Sexual Offences Act 2003

Sexual Offences Act 2003

The Sexual Offences Act 2003 is an Act of the Parliament of the United Kingdom of Great Britain and Northern Ireland that was passed in 2003 and became law on 1 May 2004.It replaced older sexual offences laws with more specific and explicit wording...

has introduced a hybrid test of reasonable belief as to consent. The defendant must now be seen to have taken steps to ascertain clearly whether the "victim" was consenting in all the circumstances. This abolishes the defence of a genuine though unreasonably mistaken belief as to the consent.

Mistakes about the criminal law

It is not a defence that the defendant held an honest and reasonable belief that what he was doing was not criminal. Where the defendant is a foreigner, and the offence is not criminal in his own country, the fact of such a belief is still not a defence. It is not a defence that the defendant believed that he would not be prosecuted for what he was doing.

Offences created by statutory instruments

Section 3(2) of the Statutory Instruments Act 1946 provides:
(Words in brackets inserted by section 1(1)(a) of the Statutory Instruments (Production and Sale) Act 1996, as read with section 1(2))

Mistakes about the civil law

A mistake about the civil law

Civil law (common law)

Civil law, as opposed to criminal law, is the branch of law dealing with disputes between individuals or organizations, in which compensation may be awarded to the victim...

may have the effect of negativing the mens rea

Mens rea

Mens rea is Latin for "guilty mind". In criminal law, it is viewed as one of the necessary elements of a crime. The standard common law test of criminal liability is usually expressed in the Latin phrase, actus non facit reum nisi mens sit rea, which means "the act does not make a person guilty...

for an offence. See:

Section 2(1)(a) of the Theft Act 1968
Theft Act 1968
The Theft Act 1968 is an Act of the Parliament of the United Kingdom. It creates a number of offences against property in England and Wales.On 15 January 2007 the Fraud Act 2006 came into force, redefining most of the offences of deception.-History:...
R v Smith (David Raymond) [1974] QB 354, 58 Cr App R 320, [1974] 2 WLR 20, [1974] 1 All ER 632, CA
R v Gould [1968] 2 QB 65, 52 Cr App R 152, [1968] 2 WLR 643, [1968] 1 All ER 849, CA
R v Barrett and Barrett, 72 Cr App R 212, [1980] Crim LR 641, CA