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Part IV Vitiation, 12 Mistake

From: Contract Law in Practice

Neil Andrews

From: Oxford Legal Research Library (http://olrl.ouplaw.com). (c) Oxford University Press, 2022. All Rights Reserved.date: 04 July 2022

Subject(s):
Interpretation of contract — Termination/unwinding of contract — Validity of contract

Occasionally English law will treat an apparent contract as void because both parties have suffered a misapprehension concerning the nature of the subject-matter. A shared fundamental mistake renders the supposed agreement a nullity. But this is possible only in extreme circumstances. English law adopts a narrow approach to mistake. In the leading case, Bell v Lever Bros (1932), Lords Atkin and Thankerton, members of the three-judge majority, considered that the test for shared mistake is whether an error has occurred which involves an essential difference between reality and the parties’ shared mistaken assumption. Because of the narrow way in which this restrictive formulation has been applied, the doctrine of shared mistake occupies a minor place in practice. An attempt by Lord Denning in Solle v Butcher (1950) to create in Equity a parallel and more pliable doctrine of shared mistake was repudiated in 2002 by the Court of Appeal in ‘The Great Peace’. But a contract can be a nullity where there is no consensus because an offer has been made to an identified person whose identity has been adopted by an impostor (who communicates other than face-to-face with the offeror). But if the impostor and offeror meet face-to-face, a voidable contract is likely to be found. This branch of the doctrine of mistake is known as ‘error as to identity’ or ‘mistaken identity’.

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