Law of Unilateral Mistake

2571 Words Mar 21st, 2013 11 Pages
RESEARCH ESSAY
Cases under the law of mistake can be divided into common, mutual and unilateral mistake; however this discussion is based on unilateral mistake, as Stephen Graw said:
“Operative unilateral mistake occurs when only one party in the contract is mistaken, the other party is or should be aware of that mistake and yet he purports to proceed with the agreement anyway.”
Cases under unilateral mistake can be divided into three categories: Firstly mistaken identity, secondly mistake as to the terms of a contract and thirdly mistake as to the nature of a document signed. The main focus in this discussion is mistaken identity, where one party is mistaken as to the identity of another. Mistaken identity may happen in two different
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In King’s Norton Metal Co v Edridge, Merret & Co Ltd, it was held that there was a contract between King’s Norton and Wallis, for the simple reason that there was no such entity called Hallam & Co, and hence good title passed from King’s Norton to the rogue, and later to the defendant; and thus the defendants were therefore not liable to pay back the goods or its value to King’s Norton. Therefore the effect of unilateral mistake is that it will make a contract void or voidable, and hence to identify which one of the two parties has the right to the title of the goods. It has been said that if a party makes a mistake as to the identity of the person he is contracting with then there is no contract, or if there is a contract then it is void such that no property can transfer under it. The legal principle prior to Phillips v Brooks is that depending on the facts, if the court’s decision is that the contract is void for mistake then the mistaken party still has the right to the title of the goods as it was seen in Cundy v Lindsay, or the mistaken party will have no legal obligation to pay for the goods as it was seen in Boulton v Jones. However, if the contract is just voidable then the good title goes to
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