正在編輯用戶:Hinnia/Mistake

= Mistake at Common Law =

== Introduction ==

=== Definition and Nature ===

* A contract may be held defective
** If one or both parties enter into it under some misapprehension or misunderstanding
** But would not have done so had they known the true position.
* Objective approach to agreement (What a reasonable person would infer from conduct)
** Mere subjective mistake is insufficient to set a contract aside.
* Central Policy Tension
** Law must balance certainty in transactions (favouring a narrow doctrine) 
*** Against the desire to protect a party from a bargain radically different from what was intended (favouring a wider doctrine).
* Terminological Confusion: Terms are used inconsistently.
** Common Mistake: Both parties make the same mistake (e.g., both believe a painting is an original).
** Unilateral Mistake: Only one party is mistaken.
** Mutual Mistake: Both parties are mistaken, but about different things (they are at cross-purposes). This term is ambiguous and often avoided.
* Key Distinction: Void vs. Voidable
** Void (ab initio): Contract is a nullity from the start
*** Produces no legal effects.
*** Crucial for third-party rights (if A's contract with B is void, B gets no title and cannot pass title to C).
** Voidable: Contract is valid until the aggrieved party chooses to set it aside (e.g., for fraud).
*** Until avoided, a rogue can pass good title to an innocent third party.

==== Brennan v Bolt Burdon [2004] EWCA Civ 1017 ====

* Establishes that for common mistake to void a contract,
* Mistake must render the contract impossible to perform.
* Mistake about the state of the law (e.g., the effect of a court judgment) does not necessarily satisfy this test if the contract remains performable.

== Absence of Genuine Agreement ==
A mistake can prevent the ''formation'' of a contract if there is no true meeting of minds (''consensus ad idem'').

* Raffles v Wichelhaus (1864) 2 H & C 906
** Facts: Contract for cotton "ex Peerless from Bombay". Two ships of that name. Buyer meant October ship; seller meant December ship.
** Held: No contract formed due to latent ambiguity. The parties were at cross-purposes. Illustrates that an objective appraisal can reveal no agreement was reached.
* Scriven Bros. & Co. v Hindley & Co. [1913] 3 K.B. 564
** Facts: Auction of two lots (hemp and tow) with identical shipping marks. Buyer bid for both, thinking they were both hemp. Auctioneer’s fault created the confusion.
** Held: No contract for the tow. A party at fault in inducing or failing to notice the other's mistake cannot enforce the contract against the mistaken party.

== Common Mistake ==
A shared fundamental mistake that nullifies consent. The modern, narrow test is from Great Peace.

=== Mistake as to the Existence of the Subject Matter ===

* Couturier v Hastie (1856) 5 HLC 673
** Facts: Sale of a cargo of corn. Unknown to both, it had perished and been sold before the contract.
** Held: Buyer not liable for the price. Rationalised as a contract void for common mistake. Codified in S.6 Sale of Goods Act 1979.
* McRae v Commonwealth Disposals Commission (1951) 84 CLR 377 (HCA)
** Facts: Sale of a non-existent tanker. Buyer (McRae) incurred salvage expenses.
** Held: Commission liable in damages. The contract was NOT void for mistake.
*** Construction: The Commission had warranted the tanker's existence (they assumed the risk).
*** Fault: The mistake was induced by the Commission's own fault (no reasonable grounds for belief).
* Key Takeaway: Shows the importance of construing the contract to see if one party has assumed the risk of the mistake. If they have, the contract stands.

=== Mistake as to the Possibility of Performance ===

* Sheikh Brothers Ltd v Ochsner [1957] AC 136
** Facts: Licence to cut sisal based on a fundamental assumption the land could produce 50 tons/month. It could not.
** Held: Contract void. The assumption was the "very basis of the contract"; its falsity rendered the contractual adventure impossible.
* Cooper v Phibbs (1867) LR 2 HL 149
** Facts: A agreed to lease a fishery from B. Unknown to both, A already had a life interest in it.
** Held: Agreement set aside. A contract to transfer a right one already owns is legally impossible (naturali ratione inutilis).
* Griffith v Brymer (1903) 19 TLR 434
** Facts: Hire of a room to view the King's coronation procession. Contract made minutes after the irrevocable decision to cancel, but before parties knew.
** Held: Contract void for mistake. 
*** Common fundamental assumption (procession would happen) was false at the time of contracting.
*** Analogous to frustration, but the frustrating event had already occurred.

=== Mistake as to a Quality of the Subject Matter ===

* The mistake must make the subject matter "essentially different from the thing it was believed to be" (Lord Atkin in Bell).
* Bell v Lever Brothers, Ltd [1932] AC 161 (Leading Case)
** Facts: Lever Bros paid large sums to terminate directors' service contracts
*** Unaware the directors had committed prior breaches that would have allowed termination for free.
** Issue: Was the compensation agreement void for common mistake?
** Held: NO. The mistake related to the quality (terminability) of the service contracts, not their existence.
*** The subject matter (the service contracts) still existed.
*** The fact Lever Bros would not have contracted if they knew the truth was irrelevant.
** Principle: Sanctity of contract prevails. A bad bargain is not voidable for mistake.
** Strict Test: Mistake must render the item essentially different.
* Scott v Coulson [1903] 2 Ch 249
** Facts: Sale of a life insurance policy. Both parties believed the assured was alive. He was dead, making the policy more valuable.
** Held: Contract set aside for common mistake.
** Principle: A policy on a living life is fundamentally different from a policy payable on a death that has already occurred.
*** The subject matter of the bargain was fundamentally altered.
* Associated Japanese Bank (International) Ltd v Credit du Nord S.A. [1989] 1 WLR 255
** Facts: Guarantee given for lease payments on four machines. The machines did not exist.
** Held: Guarantee void for common mistake.
*** A guarantee for a lease of non-existent machines is "essentially different" from a guarantee for a lease of existing ones.
*** Also held a party cannot rely on a mistake where they had no reasonable grounds for their belief.
* Great Peace Shipping Ltd v Tsavliris Salvage (International) Ltd [2002] EWCA Civ 1407
** Facts: Hire of a ship (Great Peace) to escort a vessel in distress
*** Based on a mistaken belief they were 35 miles apart (actually 410 miles).
** Issue: Was the contract void for common mistake?
** Held: NO. The contract was not impossible to perform; services could still be rendered, just later.
*** The mistake was not fundamental enough.
*** Principles Laid Down (Synthesis of the Law):
**** Contract must be impossible to perform due to the common mistake.
**** Impossibility must not be attributable to the fault of either party.
**** Must be no warranty (express or implied) by either party that the assumed state of affairs exists. 
***** i.e. the risk of the mistake must not have been allocated by the contract.
***** Doctrine is narrow. Cases will be "few and far between".
***** Overrules the separate equitable jurisdiction for common mistake (see Part II).