Sometimes a contract is formed while one or both parties are operating under a serious misunderstanding — about the subject matter, a key term, or even who they are dealing with. The law of mistake decides when that misunderstanding is serious enough to unravel the agreement, and what happens to anyone who has since bought the goods. For a solicitor advising a client who has been defrauded, sold something that never existed, or tricked into signing the wrong document, getting this right determines whether your client recovers their property or loses it to an innocent third party.
What this lesson covers:
- Foundations of Mistake — what makes a mistake "operative", the five categories, and the crucial difference between a void and a voidable contract.
- Common Mistake — where both parties share the same fundamental error, and the high threshold for it to void the contract.
- Mutual Mistake — where the parties are at cross-purposes, and the objective test the court uses to resolve it.
- Unilateral Mistake as to Identity — when a mistake about who you are dealing with voids a contract, and why face-to-face deals are different.
- Unilateral Mistake as to Terms — when one party knows the other has misunderstood a fundamental term.
- Non Est Factum — the narrow escape for someone who signed a radically different document.
- Rectification and Remedies — correcting flawed paperwork and tracing title through a bona fide purchaser.