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Mistake, Discharge of a contract - Coggle Diagram
Mistake
Common Mistake
Essential quality of the subject matter. Both parties made a mistake to the root of the terms within the contract,
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Mutual Mistake
A communication mistake, when a party misunderstood each other regarding the terms of the contract (their intentions).
Raffles v Wichelhaus
Two ships with the same name were transporting cotton from India to Liverpool, to the point of it being impossible to identify the ships. There was no meeting of the minds, rendering the contract void.
Smith v Hughes
Hughes requested oats to feed to his racehorse, which Smith provided a sample, Hughes then agreed to purchase the large amount. New oats were delivered which are not able to be fed to the horse. No mistake had occurred as the subject matter of the case was 'oats', no error over the fundamental terms.
Age is only a secondary characteristic and does not effect the agreement. No objective evidence to show the parties had formed an agreement to specifically purchase 'old' oats.
The objective test can be used (would a reasonable person...?), if so the contract could be deemed void.
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It is a mitigating factor which will make the contract invalid (void from the beginning) - never valid
Discharge of a contract
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Discharge by agreement
Both parties agree to end the contract without having carried out any of the obligations included within. (waive the terms of the contract regardless of the performance).
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Bilateral Discharge
When neither party has performed their part of the contract. They both then agree to discharge each others obligations.
Berry v Berry
Husband separated with his wife, entering into a contract to pay her a certain amount each month. Bot then agreed to discharge it in order to enter into a new one.
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Discharge by Frustration
If this was to occur then the contract can be discharged with no requirement for the obligations to be carried out.
When a supervening event outside of the parties control occurred after the parties contracted and render the performance one of the following.
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Paradine v Jane
Contract to pay rent was not discharged by the intervening event (army invasion). Court wanted to reduce liability for the such event, so made an express provision for this in the lease.
Force Majeure Clause - frees the parties from liabilities when there is an extraordinary even beyond the control of parties - which prevents them from being able to carry out obligations.
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Discharge by performance
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Cutter v Powell
Was employed as part of a crew on a voyage but dies before he reached Liverpool. Widow sued for wages owed, but did not complete contractual obligations.
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