Chapter 6 Guidance on answering the questions in the book

Mistake

1. The law on mistaken identity is beset by 'illogical and sometimes barely perceptible distinctions'. Are matters clearer after Shogun Finance Ltd v. Hudson (2003)?

This question invites you to consider the law on mistaken identity.  The sub-questions you should consider include:

  • Assess the many distinctions drawn by the law in this area.  Is each one internally coherent (ie makes sense in its own terms)?  For example, should it matter whether A mistakenly believes that B is an existent person as opposed to a fictional person? Are Ingram and Lewis reconcilable?
  • How do the distinctions relate to each other (ie are they coherent as to the priority of applicable distinctions)?  Do you agree with Shogun about the applicable law where the parties deal in each other's presence and make a written contract?  Does this rationalise the law in this area?  What uncertainties, if any, remain?
  • To what extent does the law acknowledge the different policies at stake in two party (as opposed to three party) cases?  What difference does it make whether a contract is rendered void or voidable for mistake?  What is the impact of Shogun in this context? How should two party cases be dealt with?  How should three party cases be dealt with?

2. 'The doctrine of rectification can be made consistent with upholding the parties' intentions, but the doctrine of non est factum is entirely another matter.' Discuss

See 6.1.2 Common mistake in recording the contract: rectification and 6.1.3 Unilateral mistake about the nature of the document: non est factum.

This question invites you to compare rectification with non est factum as they relate to the central justification for enforcing contracts, namely upholding the parties' voluntary assumption of obligations.  The sub-questions you should consider include:

  • What does the doctrine of rectification do?  What must be proved?  Is this consistent with upholding the parties' intentions, objectively assessed?
  • What does non est factum do?  What must be proved (compare with rectification)? To what extent is non est factum consistent with upholding the parties' intentions, objectively assessed?
  • Does it matter that non est factum is usually alleged against third parties acquiring rights in the subject matter of the contract?

3. Max, who bears a striking resemblance to a well-know pop star, walks into Nina's jewellery shop and selects an expensive diamond ring priced at £50,000. He says to Nina, 'I've forgotten my credit card, but you know who I am and that I'm good for it.' Nina is overawed and says 'yes, of course'. She allows Max to take the ring after Max signs a sale agreement, Max sells the ring on to Otis for £2,000. Max cannot be found. Advise Nina.

See 6.2 Mistake as to identity.

(i) Can Nina recover the ring from Max by pleading misrepresentation?  Has he made a misrepresentation?  What further facts do you need to know?

(ii) Nina will want to recover the ring from Otis.  Can she show a mistake of identity which voids the contract?  What is the position since the parties deal face-to-face?  What difference, if any, does it make that Max signs a written contract?  How might the contents of the contract matter?  How does Shogun apply? 

4. 'There is no doctrine of mistake; there is only the parties' contractual risk allocation.' Discuss.

See 6.3.2 The contractual allocation of risk: construction

6.3.7 Justifications for the mistake doctrine

6.3.4 Fundamental common mistake at common law

6.3.5 The effect of common mistake.

Consider and assess the propositions implied by the statement:

  • What do you make of the judicial acceptance of a doctrine of mistaken assumptions in English law? Isn’t it just too easy to plead and so endangers certainty of contract?
  • Why should mistake be irrelevant to the validity of contracts? 
  • Where does the objective test fit?
  • How does mistake relate to risk allocation by the parties?
  • How far can contract interpretation or construction take us?
  • To what extent should courts, and to what extent is it possible for courts to, simply give effect to the parties' intention in mistake situations?

5. 'It is impossible to explain any doctrine of mistaken assumptions whilst also insisting on an objective approach to contractual formation.' Discuss.

This question invites you to consider the relationship between objectivity and relief for mistake.  The sub-questions you should consider include:

  • Are objectivity and mistake mutually exclusive (see 2.1.3 Objectivity and ‘mistaken offers’)?
  • If parties' mistakes are totally irrelevant, to what extent does this undermine the justification for enforcing contracts based on the voluntary intention of the parties (see 6.3.7 Justifications for the mistake doctrine)?
  • Do the following distinctions drawn by the law tell us anything?
    • between mistake as to terms and mistake as to facts,
    • between fundamental and non-fundamental mistake, and
    • between unilateral and common mistake.
  • Where does non est factum fit?

6. 'It is irrational to recognize an equitable jurisdiction to relieve for common mistake co-existing with a common law jurisdiction to do the same. Solle v. Butcher is inconsistent with Bell v. Lever Brothers. One of them must go.' Discuss.

See 6.3.6 Common mistake at equity.

This question invites you to consider the rejection of an equitable jurisdiction to relieve from common mistake in Great Peace.  The sub-questions you should consider include:

  • What is the origin, authority and scope of the equitable jurisdiction to relieve from common mistake?
  • What reasons were given for rejecting it in Great Peace?
  • Assess these reasons: are there any counter-arguments (ie supporting the equitable jurisdiction), for example, in terms of authority, workability and remedial flexibility?   Are the cases mentioned reconcilable?
  • What would (and what should) happen to the cases currently falling within the equitable jurisdiction?
  • What are we to make of the Court of Appeal's call for greater remedial flexibility akin to that for frustration?
  • Reach a conclusion about the accuracy of the statement.

7. '[T]here is scope for legislation to give greater flexibility to our law of mistake than the common law allows.' (Great Peace Shipping v. Tsavliris Salvage). Do you agree? How might greater flexibility be achieved?

See 6.3.6 Common mistake at equity.

This question invites you to consider the future of the mistake jurisdiction post Great Peace.  The sub-questions you should consider include:

  • What remedy or remedies does the common law allow for mistake and when?  Is the situation too rigid (too all-or-nothing)?  If so, why? 
  • Flexibility might be injected at two points: (i) at the cause of action end (eg by lowering the threshold for relief) and (ii) at the remedial end, by selecting from a wider menu of relief (eg not necessarily to void the contract completely).  In view of this, what are we to make of the rejection of flexibility inherent in the rejection of an equitable jurisdiction for common mistake in Great Peace?
  • Explain whether you think there should be greater remedial flexibility in (i) the threshold for relief (if so, where should the line be drawn?), and/or (ii) the remedies available for mistake (if so, what?). 
  • Is flexibility better achieved through judicial development or legislative reform as with frustration?