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Common Mistake - Coggle Diagram
Common Mistake
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Where a contract has been made as a result of a common mistake shared by the parties, the effect of which is that the non-existence of a state of affairs that was assumed to exist renders the performance of the contract impossible, the contract will be void at Common Law - Great Peace Shipping Ltd v Tsavliris Salvage (International) Ltd [2002] EWCA Civ 1407, [2003] QB 679
Rescission for equitable common mistake is no longer an option - Great Peace Shipping Ltd v Tsavliris (International) Ltd, The Great Peace [2002]
Courts May consider that the contract should be void ab initio if unknown to the parties, and beyond their responsibility, it is impossible to perform from the outset = initial fundamental impossibility.
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Talking about initial fundamental impossibility happening before the moment of formation – court may find that the contract has not been formed, more common outcome
If it is fundamental impossibility that is in existence and then we enter into the contract, then at that point if we are both equally unaware, the common mistake may support us in asking the courts to consider the contract void
Shared both parties and directly effective on core contract, may render void particularly if it impacts whole substance of agreement.
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A common mistake, substantially shared by both parties, and relating to facts as they existed at the time the contract was made, which renders the subject matter of the contract essentially and radically different from the subject matter which the parties reasonably believed to exist, may render an apparent contract of guarantee void at common law
Common mistake, the parties do not deny that they reach agreement, but it is alleged that the contract is impossible to perform because both parties entered into the contract on the basis of the same fundamental mistaken assumption.