Direct question 1

(UiTM,JUNE 2016,q5)
Define a unilateral mistake
With reference to relevant authorities, discuss the consequence of a contract when a unilateral
mistake is present.
(6 Marks)
Answer
Unilateral mistake is when only one party is mistaken as to the subject matter contained
in the contract agreement. It can occur with regards to any of the terms and provisions contained
in a contract. For example, it can be referred to its definition of a phrase or word. However, by
the virtue of Section 21 of Contracts Act 1950, it is stated that Where both the parties to an
agreement are under a mistake as to a matter of fact essential to the agreement, the agreement is
void.
In the case of Hartog v Colin & Shields [1939] 3 All ER 566, The plaintiff, as
administrator of the estate of the deceased, sued the defendant (insurer) for the sum of money
covered under the Personal Accident policy of the deceased. The defendant had rejected the
plaintiffs claim because the signature on the proposal form did not belong to the deceased as it
had differed from the deceaseds signature on his motor insurance policy. On this ground, inter
alia, the defendant alleged that the contract was void. The issue of the case was whether the offer
accepted by the claimant is valid by the defendants mistake. The court held that the contract was
void for mistake. Hare skins were generally sold per piece and given the price the claimant must
have recognized the mistake.
To conclude that, unilateral mistake is rendered as void because it is concerning the actual
contractual terms to which the parties were supposedly agreeing.