Mistake
A comprehensive examination of common mistake, mutual mistake, and unilateral mistake at common law and in equity, with detailed analysis of the narrow scope for relief and recent doctrinal tensions
§01 Overview
Mistake is one of the vitiating factors in contract law, alongside misrepresentation, duress, and undue influence. The doctrine addresses circumstances in which one or both parties labour under a misapprehension as to a fundamental aspect of the transaction. English law takes a notably restrictive approach: the courts are reluctant to relieve parties from bargains they have freely entered, even where the contract was concluded under a mistake. The policy rationale is straightforward — certainty and the protection of third-party reliance outweigh individualized justice in most cases.
Mistake is conventionally divided into three categories:
- Common mistake: both parties share the same mistake about a fundamental state of affairs.
- Mutual mistake: the parties are at cross-purposes, each labouring under a different misapprehension.
- Unilateral mistake: one party is mistaken, and the other knows (or ought to know) of the mistake.
Only in narrowly defined circumstances will mistake render a contract void at common law. Even then, relief in equity has been severely curtailed since Great Peace Shipping Ltd v Tsavliris Salvage (International) Ltd [2002] EWCA Civ 1407, which abolished the equitable jurisdiction to rescind for common mistake on terms more generous than the common law.
This note examines the doctrinal framework, the leading cases, and the difficult conceptual distinctions between categories of mistake. It also considers the interaction with misrepresentation and rectification, and the controversial status of documents mistakenly signed (non est factum).
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