This chapter deals with situations where an agreement is affected by a mistake on the part of one or both parties. The general approach of the English courts and the different categories of mistake are dealt with first. The main topics then discussed are as follows:
Mistakes nullifying agreement. This essentially deals with situations where the parties have reached agreement, but on the basis of an important (shared) 314mistake – such as the existence of the subject matter. Such mistakes may render the ‘contract’ void. Here the shared mistake must be:
‘fundamental’, meaning performance is impossible or radically different from that which the parties had envisaged;
but mistakes as to quality will not generally render the contract void.
Mistakes negativing agreement. This type of mistake means that the parties were never in agreement. This may be because:
they were at cross-purposes (‘mutual mistake’);
one party was aware of the other’s mistake (‘unilateral mistake’).
Mistake as to the identity of the other party. This is generally a type of unilateral mistake and may render the ‘contract’ void. It is easier to establish an operative mistake of identity in contracts made at a distance (for example, by post) as opposed to those made face to face.
In some circumstances the application of equitable principles may lead to:
the refusal of specific performance;
rectification of a written contract.
Non est factum. This is essentially a plea that a person signed a document under a misapprehension as to its effect. It will only be effective where the mistake is fundamental, and the person signing it had not acted carelessly.