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Operative Mistake, Common mistake, Unilateral mistake, Mutual mistake,…
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Common mistake
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definition
Common mistake occurs where both parties to an agreement are suffering from the same misapprehension.
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Unilateral mistake
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definition
Unilateral mistake occurs where only one party is mistaken and the other party knows, or is deemed to know, of the mistake.
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Mutual mistake
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court employ an objective test and decide what a reasonable third party would believe the agreement to be, based on the words and conduct of the parties themselves.
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Shogun Finance Ltd v Hudson [2004]: In Shogun v Hudson the House of Lords considered both face-to-face situations as in Lewis v Averay, and distance-selling situations as in Cundy v Lindsay. The majority ultimately decided that Shogun was a distance-selling situation between the finance company and the fraudster, and decided to keep the distinction, reaffirming the principles to be considered in each situation
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