Common, Mutual and Unilateral Mistakes in Contract

 Mutual Mistake
The mistake must result in a complete difference in substance or quality. The court in determining whether there is mutual mistake have brought the objective test. This involves a look into the conduct and statements of the parties and if it appears that a contract exists as alleged by one of the parties, the court will enforce thee contract. But when the parties are genuinely at opposites about the subject matter if the contract, the court will hold that the contract is vitiated by reason of mistake.

Common, Mutual and Unilateral Mistakes in Contract

Unilateral Mistake

This involves one party making a mistake whether the other party knows or not. A mistake is unilateral where only one party is mistaken or is presumed to be mistaken. The other party either knows or is presumed to know that the first party is indeed laboring under a mistake. The effect of such a mistake is to render the contract void. The test to determine whether a party has made a mistake is the subjective test. It is what the party has in mind or intended to=hat will be considered and not what a reasonable person would have thought. In a situation where the other party did not induce the mistake of the first party, he may be presumed to be aware of the mistake if it could have been obvious to a reasonable man in the circumstances (Ali Yusuf v Nigerian Tobacco Company - Unreported)

Mistake as to Identity

The _____  of unilateral mistake is mistake as to identity i.e if a party intends to _____ with a particular person as he believes and he believes he’s dealing with such person whereas, the person is an impostor, then there will be a unilateral mistake. The issue that arises here is: Out of the two innocent parties, which one should bear the loss?
The burden is on the party alleging mistake to establish that there was indeed, a mistake of identity. Thus, in order to succeed in voiding a contract on grounds of unilateral mistake as your identity, the plaintiff must fulfill the following conditions:

  • Intention to contract with some other persons.
  • The identity must  be of crucial importance

3. the intention to contract with persons other than the party must be established and known to the impostor

Vitiating Elements of Contracts
1. Mistake: A Misunderstanding/misapprehension of facts in a contract
- Lord Atkin in Bell v. Lever Bros (A buys B’s horse story)
Types of Mistake
⦁    Common Mistake: Both parties are mistaken about one thing
        Knight, Frank & Rutley v. A.G Kano State
        Lord Atkin’s Petrol station story (A and B story)
If the subject matter is res-extincta (not in existence), the contract is void by mistake
⦁    Mutual Mistake: Both parties are mistaken about different facts/things. Parties are not in consensus ad idem about facts. There is no correspondence in offer and acceptance.
⦁    A puts an advert for sale of a 1970 model Royce car. The printer prints the advert for a 1960 model Royce car. B calls to buy a 1950 model Royce car. A has the three models but intends to sell only the 1970 model. There is a mutual mistake on A and B’s parts. (Although the printer is an essential cause of the mistake)

⦁    Unilateral Mistake: Here, only one party is mistaken

Equitable intervention:         1 Refusal of specific performance     2. Rescission     3. Rectification

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