Common Mistake
Triple Seven Msn 27251 Ltd & another v Azman Air Services Ltd [2018] EWHC 1348 Comm
Make Common Mistake narrow again
Review of authorities and identifies six principles
3) Assumption is wrong at the time of agreement
4) Because the assumption of wrong performance is radically different from belief at time of agreement, Or impossible, ie fundamental difference – may take us to common mistake
5) Party/ies relying on CM would not have contracted if known assumption wrong
2) Assumption must be fundamental to contract
6) No provision in contract for mistake – nothing in the contract that would automatically deal with the matter without seeking the courts assistance in relation to CM
1) At time of agreement, assumption existence of state of affairs is shared by parties
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
Shared both parties and directly effective on core contract, may render void particularly if it impacts whole substance of agreement.
Both parties make the same mistake.
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.
BUT may be that contract hasn’t been formed
Mistakes as to quality of the subject matter will not render the contract void.
logically, when you enter a contract no guarantee it will be a good deal, without anything further if there is mistake in relation to the quality of the subject matter this would not render the contract void
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
Rescission for equitable common mistake is no longer an option - Great Peace Shipping Ltd v Tsavliris (International) Ltd, The Great Peace [2002]
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.