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Doctrine of Mistake in Common Law - Case Study Example

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Author : stantonwilson


This piece is looking at the doctrine of mistake in common law and support Ewan McKendrick 's position that the Great Peace Shipping v Tsavliris Salvage Ltd1 case has reduced the doctrine of mistake to a vanishing point.
Caveat emptor ("let the buyer beware") is the basic underlying principle in the law of contract…

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Doctrine of Mistake in Common Law

In some other cases even when the contract is valid in law, it may be rendered voidable in equity on the ground of mistake.
The general thinking used to be that mistakes could not be operative in law until in case of Kleinwort Benson v Liverpool City Council3 when the House of Lords declared that this rule is not part of English law. Treitel4 has considered the laws relating to mistake under five headings: Common Mistake; Mutual Mistake; Unilateral Mistake; Mistake as to Identity; Mistake Relating to Documents.
While commentators are not agreed as to the classifications of Mistake, Treitel5 in his book; The Laws of contract, 11th edition, deals with Mistake by contrasting Mistake nullifying consent (Parties reach agreement which is based on a fundamental mistaken assumption) with Mistake negativing consent (Where mistake prevents the parties from reaching an agreement e.g. where they intend to contract about different things).
Some commentators have gone on to divide mistake into two parts, that is, common mistake shared by the parties, and mistake in communication. In a common mistake shared by both parties, although both parties apparently in agreement, have entered into the contract on the basis of a false and fundamental assumption. It is called common mistake since both parties make the same mistake. The contract is not necessarily void at law in these circumstances.
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