LAW

To Err is to be Human, But a Contractual Mistake Could Cost You a Fortune 💰️

What if the contract I entered wasn’t the contract I thought I was entering, because I made a mistake? Would the law have my back or am I stuck with a contract I didn’t want? This is where the law on mistake comes into play. If I made a mistake, which I relied upon when entering a contract, the contract itself may be void. So, let’s have a look at what happens when I should’ve gone to Specsavers.

💡 Things to consider

• Unilateral Mistakes: If only one party to the contract was mistaken about its terms, then that would be a unilateral mistake. A “term” is something of central importance to the contract, e.g. the existence of a goat if I am purchasing a goat. So, unilateral mistakes surrounding facts that are not terms don’t necessarily have legal consequences, e.g. the name of the goat’s mother. If the other party was either misleading or aware of the mistake, or the contract was simply ambiguous, then it will be void and ineffective.

  

  Awww, thanks!

  The courts determine knowledge of the mistake based on whether the party ought to have known. For instance, in Chwee Kin Keong v Digilandmall.com Pte Ltd [2005] 1 SLR(R) 502, Digilandmall.com accidently priced their printers at $66 instead of $3000, which Chwee Kin Keong then purchased. The court determined that he must have had knowledge of the mistake because he recognised the undervalue by ordering such a large quantity of them. So, the contract was void.

  

• Common Mistakes: If both parties were mistaken about the terms of the contract, then that would be a common mistake. What matters here is whether the mistake surrounds something so fundamental that it makes contractual performance impossible. So, if there were a mistake relating to the contract’s subject matter, then it would be void. For example, in Strickland v Turner (1852) 7 Ex 208, a contract for the annuity of a person’s life was void since the person was already dead. Similarly, if the parties mistakenly believe the subject matter exists, then it will be void.

  

  For instance, in Couterier v Hastie (1856) 5 HL Cas 673, an incoming shipment of corn was sold, but it was destroyed by heat during transit. Since the corn did not exist when the contract was made, it was voided for mistake. Alternatively, in Smith v Hughes (1870) LR 6 QB 597, a contract to sell oats was not voided when the mistake related to the type of oat sold. This mistake as to quality was not considered fundamental to the contract.

  

  Not in this case

• Tom Hardy?: If I made a contract with someone who said they were the real Tom Hardy, but they were actually a fraudster after my money, would that contract be valid? This would be a mistake as to identity, which is a surprisingly complicated area of the law. If the contract was made in writing without face-to-face contact, then the contract will be void since only those named in the contract can be privy to it. If the contract was made face-to-face, then, generally speaking, it’s only voidable, not void, as it was intended to be with the person in front of you. A void contract is completely nullified as if it never existed, so all actions are undone. A voidable contract gives you the right to rescind it, but the contract is enforceable until you do. Do you think it makes sense to distinguish between a face-to-face contract and a contract in writing?

  

🔎 Find out more

• Types of mistakes in contract law

• More on mistakes in contract law

• Mistaken identity in contract law

• Mistaken identity case studies

🍒 The cherry on top

• ❓️ Revisionist History: How do we know which accounts of history to believe? Why might history be edited or rewritten? What are the consequences of this? If you are interested in History or Sociology, this article is definitely worth a read.

• 🤖 Moral Machines: With the rise of AI, machines are carrying out more and more tasks once carried out by a human. But can machines ever carry out tasks or make decisions using the same level of empathy as humans? If you are interested in Philosophy or Computer Science, this article offers some interesting perspectives.

• 🏨 Hilbert’s Hotel: Have you heard of the Hilbert’s Hotel thought experiment? Based on mathematical concepts such as countable infinity, this fascinating thought experiment challenges us to conceptualise what infinity actually is. This YouTube video is perfect for those interested in Maths.

👀 Keep your eyes peeled for…

• Wednesday 29th October

  • St Mary’s University Computer Science Masterclass

  • University of Sheffield English Literature Taster Session

  • University of Sheffield Maths Taster Session

🗳️ Poll