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Mistake

contract law notes

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42 views9 pages

Mistake

contract law notes

Uploaded by

setikotsholo
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Definition and

classification of mistake
 Mistake is one of the factors that may affect
the validity or enforceability of an agreement.
 A mistake is an error or a misunderstanding on
some material aspect of the agreement.
 One or both parties to the contract may have
laboured under a mistake.
 In this way mistake may be classified as
unilateral, common or mutual.
 In unilateral mistake, only one part is
mistaken. In George v Fairmead, the mistake,
if operative, would have been unilateral.
Common mistake

 A common mistake occurs where both parties


to the contract are labouring under the same
type of mistake.
 The res extincta principle in the law of sales is
founded on common mistake.
 There is no valid contract of sale if at the time
of contracting, unbeknown to both parties, the
res vendita had ceased to exist, through no
fault of the seller.
Mutual mistake
 A mistake may be classified as mutual, if both
parties were mistaken, but the mistake was not
the same.
 Maritz v Pratley, (1894) 11 SC 345 was resolved
as a case of mutual, not unilateral mistake. At an
auction, a mirror was placed on top of a mantel
piece. The auctioneer called for bids for Lot 1208,
the mantel piece. Pratley, the successful bidder,
thought he had bought the mirror as well, which
was Lot 1209. He refused to pay for mantel piece.
It was held that the mistake was reasonable, and
there was no contract.
 Allen v Sixteen Stirling Investments (Pty) Ltd,
1974 (4) SA 164, was also regarded as an
example of a mutual error in corpore.
 Why was this so?
Further classification of
mistake.
 Under the common law applicable in Botswana,
mistake is classified not in reference to the
parties, but to what they were mistaken about.
 An error in corpore is a mistake as regards the
object of the contract. See for example, Maritz v
Pratley and Allen v Sixteen Stirling Investments.
 An error in personam is a mistake as regards
the identity of a party to a contract.
 An error in substantia is a mistake as regards
some attribute of the contract. It may be the
creditworthiness of a party, in which case it
would not be an error in personam, but in
substantia.
Further classification of
mistake cont.
 An error in motive would be mistake as regards
the reasons or motive for entering into an
agreement.
 Errors in personam, in substantia or in motive
are not likely to be regarded as operative.
 An operative mistake vitiates an agreement. It
renders the contract void, as there would be no
true consensus.
 However a mistake is not operative, merely
because of the manner in which it is classified.
 A mistake is operative when a set number of
factors are present.
Operative mistake
 An operative mistake must be a mistake as to some
fact, not as to the law or legal consequences:
ignorantia juris, neminen excusat.
 It must be a mistake as to some material fact.
 A fact would be material if the mistaken party would
not have contracted had he known the true position.
 A mistake must also be reasonable. This is
sometimes reflected as the justus error
requirement.
 It is a most important factor on which many case
turn.
Reasonable mistake (justus
error)
 This is assessed, first, from the perspective of a
reasonable person.
 Would he have been mistaken in the
circumstances?
 This eliminates from the determination carelessly
made mistake.
 It is careless to sign a contract without reading.
 An allegation of mistake as to what such a
contract contained may not be justus.
 George v Fairmead, Klette v Dick Drilling Services
and Mosienyane v Dobo involved such carelessly
made mistakes.
Justus error cont.
 In National and Overseas Distributors Corporation (Pty) Ltd v
Potato Board, the court suggested that a unilateral mistake,
not induced by the other party, is not likely to be justus.
 This proposition was invoked in Thobega v Botswana MVI Fund,
and Standard Chartered Bank Ltd v Estate Construction Ltd.
 In Trollip v Jordaan, a majority of the South African Appellate
Division did not regard as a justus a unilateral mistake induced
by the other party’s innocent misrepresentation.
 There was also no liability for a misrepresentation because an
exclusion clause incorporated in the contract was applicable.
 The court in Allen v Sixteen Stirling Investments Ltd did not
follow Trollip V Jordaan, or invoke the proposition in the Potato
Board case.
Justus error continued
 The Court in Allen emphasised that it was
dealing with a mutual error in corpore that was
justus in the circumstances.
 The Court of Appeal in Botswana followed a
similar approach in Tlokweng Land Board v
Matsetse No. CALCLB 005 – 07.
Assessment of justus error may also
involve application of the doctrine of estoppel.
 Mistake was for this reason not an issue in
Charway v Attorney General.
 It could also have been an additional reason for
the decision in George v Fairmead.

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