Mistake Cases

Boulton v Jones (1857)

BOULTON v. JONES AND ANOTHER. NOV. 25, 1857.—The defendants, who had been in
the habit of dealing with B., sent a written order for goods directed to B. The plaintiff, who
on the same day had bought B.'s business, executed the order without giving the defendants
any notice that the goods were not supplied by B.
Held, that the plaintiff could not maintain an action for the price of the goods against the
defendants.
Action for goods sold. Plea. Never indebted.
At the trial before the Assessor of the Court of Passage at Liverpool, it appeared that the
plaintiff had been foreman and manager to one Broeldehurst, a pipe hose manufacturer, with
whom the defendants had been in the habit of dealing, and with whom they had a running
account. On the morning of the 13th January, 1857, the plaintiff bought Brocklehurst's stock,
fixtures, and business, and paid for them. In the afternoon of the same day, the defendant's
servant brought a written order, addressed to Brocklehurst, for three 50-feet leather hose 2£
in. The goods were supplied by the plaintiff. The plaintiffs book keeper struck out the name
of Brocklehurst and inserted the name of the plaintiff in the order. An invoice was afterwards
sent in by the plaintiff to the defendants, who said they knew nothing of him. Upon these
facts, the jury, under direction of the Assessor, found a verdict for the plaintiff, and leave was
reserved to the defendants to move to enter a verdict for them.
Mellish having obtained a rule nisi accordingly, M'Oubrey, now shewed cause. It is not
denied by the defendants that the goods, for the price of which this action is brought, were the
goods of the plaintiff. No one but the plaintiff could have sued fo.r the price of them. By
keeping the goods after notice that the plaintiff was the owner, the defendants must be taken
to have adopted the contract with him. Bickerton v. Burrell (5 M. & Sel. 383) turned on the
point that notice had not been given, before action brought, that the plaintiff was the party
really interested. In that case the plaintiff represented himself as agent for another [565]
person. In Humble v. Hunter (12 Q. B. 310) the plaintiff had allowed her son to represent
himself as owner. Here the defendant may have known of the change of name in the orders.
In llayner v Grote (15 M. & W. 359) the plaintiff had represented himself to be merely the
agent, but, being really the principal, he was held entitled to maintain the action. He referred
also to Skinner v. Stocks (4 B. & Aid. 437). Mellish, in support of the rule. This is not a case
of principal and agent. In llayner v. Grote (15 M. & W. 359) there was evidence that, at the
time of the delivery of the first parcel of the goods, the defendant had notice that the plaintiff
was the principal. [Martin, B. Here there was some evidence of acceptance, the invoice was
sent in and the goods were not returned.] They may have been destroyed, and, in fact, were
probably used at the time they were ordered. No set-off could be pleaded to the present action
in respect of any debt which might be due from Brocklehurst to the defendant: Isberg v.
Bowden (8 Excb. 852). The question is not to whom the goods belonged, but with whom the
contract was made. Humble v. Hunter (12 Q. B. 310) and Bickerton v. Burrell (5 M. & Sel.
383) are authorities in favour of the defendants.
POLLOCK, C. B. The point raised is, whether the facts proved did not shew an intention on
the part of the defendants to deal with Brocklehurst. The plaintiff, who succeeded
Brocklehurst in business, executed the order without any intimation of the change that had
taken place, and brought this action to recover the price of the goods supplied. It is a rule of
law, that if a person intends to contract with A., B. cannot give himself any right under it.
Here the order in writing was given to [566] Brocklehurst. Possibly Brocklehurst might have
adopted the act of the plaintiff in supplying the goods, and maintained an action for their
price. But since the plaintiff has chosen to sue, the only course the defendants could take was
to plead that there was no contract with him.
MAKTIN, B. I am of the same opinion. This is not a case of principal and agent. If there was
any contract at all, it was not with the plaintiff. If a man goes to a shop and makes a contract,
intending it to be with one particular person, no other person can convert that into a contract
with him.
BRAMWELL, B. The admitted facts are, that the defendants sent to a shop an order for
goods, supposing they were dealing with Brocklehurst. The plaintiff', who supplied the
goods, did not undeceive them. If the plaintiff were now at liberty to sue the defendants, they
would be deprived of their right of set-off as against Brocklehurst. When a contract is made,
in which the personality of the contracting party is or may be of importance, as a contract
with a man to write a book, or the like, or where there might be a set-off, no other person can
interpose and adopt the contract. As to the difficulty that the defendants need not pay
anybody, I do not see why they should, unless they have made a contract either express or
implied. I decide the case on the ground that the defendants did not know that the plaintiff
was the person who supplied the goods, and that allowing the plaintiff to treat the contract as
made with him would be a prejudice to the defendants.
CHANNELL, B. In order to entitle the plaintiff to recover he must shew that there was a
contract with himself. The order was given to the plaintiff's predecessor in business. The
plaintiff executes it without notifying to the defendants [567] who it was who executed the
order. When the invoice was delivered in the name of the plaintiff, it may be that the
defendants were not in a situation to return the goods. Rule absolute.
Chwee Kin Keong v Digilandmall Com Pte Ltd (2005)
The defendant was a company that sold information technology products across the internet.
As part of its business it operated a website owned by Hewlett Packard and its own website
('the Digilandmall website'). On 8 January 2003 employees of an entity related to the
defendant, Digiland International Ltd ('DIL') were undergoing a training session at the
defendant's premises. A DIL employee inadvertently loaded contents of the training template
onto the Digiland commerce website, which then automatically and instantaneously initiated
the insertion of similar contents onto all three websites. As a result of the mistake the price of
the laser printer 'HPC 9660A Color Laserjet 4600' was advertised at the wrong price of $66.
The actual price was $3,854. All six plaintiffs were graduates conversant with the usage of
the internet and its practices, and endowed with more than an adequate understanding of
business and commercial practices. There were various communications between the six
plaintiffs on 13 January 2003, including a comment from a third party to the first plaintiff that
he thought the price of the printers was the 'wrong posted price'. In the early hours of 13
January 2003 the six plaintiffs placed orders over the internet for 1,606 of the printers.
Confirmation notes were automatically despatched to the plaintiffs through e-mail. When the
defendant learnt of the error the advertisement was promptly removed from the websites and
the plaintiffs, as well as 778 other buyers of the printers, were informed that the price posting
was an error and that the defendants would not be meeting the orders. The plaintiffs
collectively and individually maintained that while they thought the price of $66 was a good
deal, they did not think that the website prices had been mistakenly placed or inserted. It was
submitted on behalf of the plaintiffs that the contract was binding and one which the
defendant was obliged to honour. The main issue in the proceedings was the level of
knowledge possessed and/or belief entertained by each of the plaintiffs when they entered
into each of the transactions for the purchase of the laser printers. In addition counsel for both
sides applied to make amendments following their submissions, therefore the issue of
amending particulars also arose.
HELD: Claims dismissed.
(1) Contracts could be effectively concluded over the internet and programmed computers
sending out automated responses could bind the sender. The elements of an offer and
acceptance were ex facie satisfied in every transaction asserted in the plaintiffs' claims.
Adopting an objective standard, executory contracts had in fact been entered into and
concluded between the parties. The e-mails had all the characteristics of unequivocal
acceptances. It was plain that the defendant had given careful consideration to the issue and
was prepared to contract on the basis that it would be able to comply with orders—hence,
there was no reference to any order being subject to stock availability. The modern approach
to consideration in contract law required very little to find the existence of consideration. On
the basis of existing case law, mutual promises more than amply constituted consideration
(see paras [134], [136], [138]–[139], below). Williams v Roffey Bros &
Nicholls (Contractors)  Ltd [1990] 1 All ER 512 applied.
Per curiam. (i) Website advertisement is in principle no different from a billboard outside a
shop or an advertisement in a newspaper or periodical. Placing an advertisement on the
internet is essentially advertising or holding out to the world at large. As with normal
contracts, internet merchants have to be cautious how they present an advertisement, since
this determines whether the advertisement will be construed as an invitation to treat or a
unilateral contract. This is essentially a matter of language and intention, objectively
ascertained. The web merchant, unless he qualifies his offer appropriately, by making it
subject to the availability of stock or some other condition precedent, could be seen as
making an offer to sell an infinite supply of goods. A prospective purchaser is entitled to rely
on the terms of the web advertisement. The law may not imply a condition precedent as to the
availability of stock simply to bail out an internet merchant from a bad bargain, a fortiori in
the sale of information and probably services, as the constraints as to availability and supply
may not usually apply to such sales. It is therefore incumbent on the web merchant to protect
himself, as he has both the means to do so and knowledge relating to the availability of any
product that is being marketed. Transactions over websites are almost invariably
instantaneous and/or interactive. The sender will usually receive a prompt response. The
recipient rule for acceptance appears to be the logical default rule. Web merchants ought to
ensure that they either contract out of the receipt rule or expressly insert salient terms within
the contract to deal with issues such as a choice of law, jurisdiction and other essential terms
relating to the passing of risk and payment. Inevitably mistakes will occur in the course of
electronic transmissions and the financial consequences could be considerable. The court has
to be astute and adopt a pragmatic and judicious stance in resolving such issues. The
amalgam of factors a court will have to consider in risk allocation ought to include: (a) the
need to observe the principle of upholding rather than destroying contracts, (b) the need to
facilitate the transacting of electronic commerce and (c) the need to reach commercially
sensible solutions while respecting traditional principles applicable to instances of genuine
error or mistake. It is essential that the law be perceived as embodying rationality and fairness
while respecting the commercial imperative of certainty (see paras [93]–[94], [96], [101]–
[103], below).
(ii) The time may have come for the common law to shed the pretence of searching for
consideration to uphold commercial contracts. The marrow of contractual relationships
should be the parties' intention to create a legal relationship (see para [139], below).
(iii) The internet has revolutionised commerce and radically altered the manner in which
commercial interaction currently takes place. The law will have to organically adapt itself to
respond to new challenges without compromising on certainty and fairness. Given its global
reach and ever-changing technological advancements, internet usage will pose a myriad of
issues for resolution. Users may find that it may not be as forgiving as more traditional
methods of communications. That said, it also offers new avenues of evidential proof offering
intimate insights into realtime thought processes and reactions (see para [155], below).
(2) There was a distinct line of cases within the narrow confines of unilateral mistake where
the common law had been resolutely disinclined to enforce apparent contracts. The essence of
'snapping up' laid in taking advantage of a known or perceived error in circumstances which
ineluctably suggested knowledge of the error. The defendant had properly asserted that there
was a unilateral mistake that vitiated all the 'contracts'. The plaintiffs had, at all material
times, knowledge, or at the very least a real belief, that an error had been made by the
defendant in the price posting. It was sufficient for a unilateral mistake to displace an
agreement that the other party knew or ought reasonably to have known that the mistake
existed. That could include circumstances where the non-mistaken party failed to make
reasonable inquiries called for in the circumstances that would have revealed the mistake.
The non-mistaken party's appreciation that there was no real offer on the contract's literal
terms undermined the basis of the objective theory and necessarily imported the lack of
subjective intention on the part of the mistaken party. A party which had shut its eyes to the
obvious was being neither honest nor reasonable and ought to be affixed with the knowledge
of the mistake; such a party would not have any legitimate expectation that the contract in
question would be either respected or sanctioned by the court. The essence of 'snapping up'
was taking advantage of a known or perceived error, in circumstances which ineluctably
suggested knowledge of the error. A typical, but not defining, characteristic of conduct of that
nature was the haste or urgency with which the non-mistaken party sought to conclude a
contract; the haste was induced by the latent anxiety that the mistaken party might learn of
the error and as a result correct or change its mind about entering the contract. The plaintiffs,
by their own admission, had made internet searches through various search engines to
ascertain the profits they could make. The stark gaping difference between the price posting
and the market price of the laser printer would have made it obvious to any objective person
that something was seriously amiss. The plaintiffs, given their backgrounds, would in any
event each have separately realised and appreciated, before placing their purchase orders, that
a manifest mistake had occurred—even if no communications on the error had taken place
between them. If the price of a product was so absurdly low in relation to its market value, it
stood to reason that a reasonable man would harbour a real suspicion that the price might not
be correct or that there might be some troubling underlying basis for such a pricing. Where
there appeared to be no reasonable explanation for an absurd price discrepancy, it was
axiomatic that any hasty conduct, such as that of the plaintiffs in 'snapping up', was to be
punctiliously scrutinised and dissected. In 'mass mistake' cases, even where there was no
direct evidence, as in the instant proceedings, the court could be prepared pragmatically to
assume actual or deemed knowledge of the manifest mistake. Where the purchaser had
readily accessible means from the same computer screen, to ascertain through a simple search
whether the mistake had taken place, the onus could be upon him to exonerate himself of
imputed knowledge of the mistake. It was improper for a party who knew, believed or ought,
objectively speaking, to have known of a manifest error to seek commercial benefit from
such an error. It was unequivocally unethical conduct tantamount to sharp practice. The
circumstances under which the orders had been placed and the quantities sought to be
purchased wholly undermined counsel's contentions that the plaintiffs had lacked knowledge
or belief in the existence of the mistake. There was no doubt that the plaintiffs had acted with
haste in the dead of the night in placing as many orders as each of them had felt their
financial resources credibly permitted them to do. They had clearly been anxious to place
their orders before the defendant took steps to correct the error. It was clear from the
authorities that such a contract, if entered into by a party with actual or presumed knowledge
of an error, was void from the outset. There was therefore no precondition in law for a
mistaken party to show an absence of carelessness to avail himself of that defence; the law
precluded a person from seeking to gain an advantage improperly in such circumstances (see
paras [110], [112]–[113], [115]–[116], [142]–[149], below). Tamplin v James (1880) 15 Ch
D 215 applied. Baden v Société Generale pour Favoriser le Développement du Commerce et
de l'Industrie en France SA [1992] 4 All ER 161, Commission for the New Towns v
Cooper (Great Britain)  Ltd [1995] 2 All ER 929 and OT Africa Line Ltd v Vickers plc [1996]
1 Lloyd's Rep 700 considered.
Per curiam. (i) Normally a contract is concluded only when the acceptance is communicated
by the offeree to the offeror. A contract will not be concluded unless the parties are agreed as
to its material terms. There must be 'consensus ad idem'. Whether the parties have reached
agreement on the terms is not determined by evidence of the subjective intention of each
party. It is, in large measure, determined by making an objective appraisal of the exchanges
between the parties. This involves looking at the objective meaning of the words used in an
agreement and ascertaining both parties' intentions when entering the agreement. As the law
now stands, mistakes that are not fundamental, or which do not relate to an essential term, do
not vitiate consent. Mistakes that negative consent do not inexorably result in contracts being
declared void. In some unusual circumstances where a unilateral mistake exists, the law can
find a contract on terms intended by the mistaken party (see paras [104], [107], below).
(ii) The Canadian courts have been the most active common law courts explicating and
developing the area of law regarding 'snapping up', which has also been recognised in
Australian law. In Canada a party may not 'snap up' an obviously mistaken offer. It is not
necessary for the non-mistaken party to have actual knowledge of the mistake, it is sufficient
that the mistake would have been obvious to a reasonable person in light of the surrounding
circumstances. Through their equitable jurisdiction the Canadian courts have integrated the
concept of common law mistake within the rubric of unconscionability, giving them a broad
and elastic jurisdiction to deal with commercially inappropriate behaviour (see paras [118]–
[119], below). Hartog v Colin & Shields [1939] 3 All ER 566, McMaster University v
Wilchar Construction Ltd [1971] 3 OR 801, Belle River Community v Kaufman Co (WJC)
(1978) 20 OR (2d) 447, Taylor v Johnson (1983) 151 CLR 422, First City Capital Ltd v BC
Building Corp (1989) 43 BLR 29 and 25659 BC Ltd v 456795 BC Ltd (1999) 171 DLR (4th)
470 considered.
(iii) However, there are persuasive arguments against extending the litmus test of
unconscionability to all mistake-type situations. First, it is clear that the line of Australian and
Canadian cases have broadened their equitable jurisdiction on the strength of dicta of dubious
pedigree attributable principally to Lord Denning. Secondly, widening the scope of mistake,
unilateral or otherwise, under the rubric of equitable mistake will, with its malleability, only
encourage uncertainty and litigation. Coherence can be restored to this area of the law only
by declaring that there is no jurisdiction to grant rescission of contract on the ground of
common mistake where the contract is valid and enforceable on ordinary principles of
contract law. Established common law principles in the area of mistake ought not to be trifled
with unless they are obviously anachronistic and ill-suited to commercial and legal
pragmatism. This is a matter perhaps better left to law reform rather than to incremental
judge-made law, which may sow the seeds of confusion and harvest the returns of uncertainty
(see paras [120], [128], [130], below). Cundy v Lindsay (1878) 3 App Cas 459, McRae v
Commonwealth Disposals Commission (1951) 84 CLR 377 and Taylor v Johnson (1983) 151
CLR 422 considered. Dicta of Lord Denning MR in Solle v Butcher [1949] 2 All ER 1107 at
119, in Magee v Pennine Insurance Co Ltd [1969] 2 All ER 891 at 893, in Lewis v
Averay [1971] 3 All ER 907 at 911 and of Lord Phillips of Worth Matravers MR in Great
Peace Shipping Ltd v Tsavliris Salvage (International) Ltd, The Great Peace [2002] 4 All ER
689 at [156]–[157], [160]–[161] considered.
(3) In cases where the facts raised in proposed amendments to pleadings
[2005] 2 LRC 28 at 33had been addressed during the evidence and submissions and,
particularly, where the opposing side had also had an opportunity to address the very same
points, there could hardly ever be any real prejudice. The pleadings, in such instances, merely
formalised what was already before the courts. To assert that, as a 'rule', leave to amend
particulars would be refused was both illogical and incorrect. In principle, there was no
difference between amending particulars and amending a cause of action, defence or any
other part of substance in a pleading. The essential point remained: would prejudice be
caused and/or were any policy considerations called into play? The essence was not so much
in the nature of the amendment but rather in the consequences flowing from any amendment
to the pleadings. In the instant case there was no element of surprise or prejudice to the
plaintiffs as the points raised had already been developed by the defendant and addressed by
the plaintiffs. The amendments sought by the defendant were allowed and leave was also
given to the plaintiffs to adduce further evidence, if they so desired (see paras [86]–[87], [89],
below).
Per curiam. It is axiomatic that a court will generally be cautious if not reluctant to effect any
amendments once the hearing has been commenced; even more so once the evidential phase
of the proceedings has been completed. However, the rules of court, which are meant to
facilitate the conduct of proceedings, invariably encapsulate concepts of procedural fair play.
They are not mechanical rules to be applied in a vacuum, devoid of a contextual setting.
Rules and case law pertaining to amendments are premised upon achieving even-handedness
in the context of an adversarial system by: (a) ensuring that the parties apprise each other and
the court of the essential facts that they intend to rely on in addressing the issues in
controversy or dispute; (b) requiring that an amendment should be attended to in the usual
course of events, at an early stage of proceedings, to ensure that no surprise or prejudice is
inflicted on or caused to opposing parties; (c) requiring careful consideration whether any
amendments sought at a late stage of the proceedings will cause any prejudice to the
opposing party (prejudice is to be viewed broadly to encompass any injustice and embraces
both procedural and substantive notions); (d) recognising that while a costs award against the
party seeking late amendments can frequently alleviate any inconvenience caused, this may
not always be appropriate and (e) taking into account policy considerations that require
finality in proceedings and proper time management of the courts' resources and scheduling.
As a matter of fairness, allowing amendments at a late stage should usually go hand in hand
with granting leave to the other party to adduce further evidence, if necessary (see paras [84]–
[86], below). Ketteman v Hansel Properties Ltd [1988] 1 All ER 38 considered.
Extra Notes
Unilateral mistake
[104] The creases over the theoretical approach to adopt in determining the existence of
contracts have for some time now been decisively ironed out in favour of the objective
theory. The most recent and authoritative pronouncement in this area (Shogun Finance Ltd v
Hudson [2003] UKHL 62, [2004] 4 LRC 255 at [123] per Lord Phillips of Worth Matravers)
states:
'A contract is normally concluded when an offer made by one party (the offeror) is accepted
by the party to whom the offer has been made (the offeree). Normally the contract is only
concluded when the acceptance is communicated by the offeree to the offeror. A contract will
not be concluded unless the parties are agreed as to its material terms. There must be
“consensus ad idem”. Whether the parties have reached agreement on the terms is not
determined by evidence of the subjective intention of each party. It is, in large measure,
determined by making an objective appraisal of the exchanges between the parties. If an
offeree understands an offer in accordance with its natural meaning and accepts it, the offeror
cannot be heard to say that he intended the words of his offer to have a different meaning.
The contract stands according to the natural meaning of the words used. There is one
important exception to this principle. If the offeree knows that the offeror does not intend the
terms of the offer to be those that the natural meaning of the words would suggest, he cannot,
by purporting to accept the offer, bind the offeror to a contract (see Hartog v Colin &
Shields [1939] 3 All ER 566 and Smith v Hughes (1871) LR 6 QB 597). Thus the task of
ascertaining whether the parties have reached agreement as to the terms of a contract can
involve quite a complex amalgam of the objective and the subjective and involve the
application of a principle that bears
[2005] 2 LRC 28 at 57close comparison with the doctrine of estoppel. Normally, however,
the task involves no more than an objective analysis of the words used by the parties. The
object of the exercise is to determine what each party intended, or must be deemed to
have intended.' (My emphasis.)
In the Singapore context a similar approach has been adopted by the Court of Appeal
in Aircharter World Pte Ltd v Kontena Nasional Bhd [1999] 3 SLR 1 at [30]–[31]
and Projection Pte Ltd v Tai Ping Insurance Co Ltd [2001] 2 SLR 399 at [15].
[105] It is not only reasonable but right that the objective appearance of a contract should not
operate in favour of a party who is aware, in the eyes of the law, of the true state of affairs
when, for instance, there is real misapprehension on the part of the mistaken party and when
the actual reality of the situation is starkly obvious. There cannot be any legitimate
expectation of enforcement on the part of the non-mistaken party seeking to take advantage
of appearances. Having said that, this exception must always be prudently invoked and
judiciously applied; the exiguous scope of this exception is necessary to give the commercial
community confidence that commercial transactions will almost invariably be honoured when
all the objective contractual indicia are satisfied. The very foundations of predictability,
certainty and efficacy, underpinning contractual dealings, will be undermined if the law
and/or equity expands the scope of the mistake exception with alacrity or uncertainty. The
rigour in limiting this scope is also critical to protect innocent third party rights that may have
been acquired directly or indirectly. Certainty in commercial transactions should not be
trifled with, as this will inevitably affect how commercial and business exchanges are
respected and effected. The quintessential approach of the law is to preserve rather than
to undermine contracts. Palm tree justice will only serve to inject uncertainty into the law. In
light of these general observations, I now address the law on unilateral mistake.
[106] In the Singapore context, the first port of call when confronted with issues of contract
law is inevitably Professor Andrew Phang's treatise on Cheshire, Fifoot and Furmston's Law
of Contract (2nd Singapore and Malaysian edn, 1998). He classifies mistake in the following
manner (at p 386):
'If attention is fixed merely on the factual situations, there are three possible types of mistake:
common, mutual and unilateral. In common mistake, both parties make the same mistake. In
mutual mistake, the parties misunderstand each other and are at cross-purposes. In unilateral
mistake, only one of the parties is mistaken. The other knows, or must be taken to know, of
his mistake. When, however, the cases provoked by these factual situations are analysed, they
will be seen to fall, not into three, but only two distinct legal categories. Has an agreement
been reached or not? Where common mistake is pleaded, the presence of agreement is
admitted. The rules of offer and acceptance are satisfied and the parties are of one mind.
What is urged is that, owing to a common error as to some fundamental fact, the agreement is
robbed of all efficacy. Where either mutual or unilateral mistake is pleaded, the very
existence of agreement is denied. The argument is that, despite appearances, there is no
[2005] 2 LRC 28 at 58real correspondence of offer and acceptance and that therefore the
transaction must necessarily be void.' (My emphasis.)
[107] As the law now stands, mistakes that are not fundamental, or which do not relate to an
essential term, do not vitiate consent. Mistakes that negative consent do not inexorably result
in contracts being declared void. In some unusual circumstances where a unilateral mistake
exists, the law can find a contract on terms intended by the mistaken party.
Must the unilateral mistake be known?
[108] Chitty on Contracts (28th edn, 1999) vol 1 (at para 5–035) observes:
'It is not clear whether for the mistake to be operative it must actually be known to the other
party, or whether it is enough that it ought to have been apparent to any reasonable man. In
Canada, the latter suffices.'
[109] This cautious statement by Chitty needs to be carefully reconsidered in the context of
recent developments in this area of law. A steady stream of decisions from common law
courts indicate a measured but nevertheless distinctly incremental willingness to extend the
scope of the exception to not just actual knowledge, but deemed or constructive knowledge as
well.
[110] In OT Africa Line Ltd v Vickers plc [1996] 1 Lloyd's Rep 700 at 703 Mance J held that
the objective theory ought not to apply if a party had knowledge that a mistake had occurred:
'The question is what is capable of displacing that apparent agreement. The answer on the
authorities is a mistake by one party of which the other knew or ought reasonably to have
known. I accept that this is capable of including circumstances in which a person refrains
from or simply fails to make enquiries for which the situation reasonably calls and which
would have led to discovery of the mistake. But there would have, at least, to be some real
reason to suppose the existence of a mistake before it could be incumbent on one party to
question whether another party meant what he or she said.' (My emphasis.)
[111] This approach appears to have been endorsed by Judith Prakash J in Ho Seng Lee
Construction Pte Ltd v Nian Chuan Construction Pte Ltd [2001] 4 SLR 407 at [84] where it
was also accepted that: 'The test is an objective one based on what a reasonable person would
have known in similar circumstances.' She opined that situations where unilateral mistake had
been considered were those involving 'fraud or a very high degree of misconduct'. I agree that
this exception should be kept within a very narrow compass. I would not, however, invariably
equate the required conduct with fraud. To confine this exception to instances of fraud would
make the concept of unilateral mistake redundant. Unlike instances of fraud, where it is said
fraud unravels the existing contract, in instances of unilateral mistake the very existence of
the contract is negatived—there is no consensus. The essence of unilateral mistake is the
knowledge or deemed knowledge of a mistake and though fraud may often be present it is not
an essential ingredient. There are many different shades of sharp practice or impropriety.
Phang (Cheshire, Fifoot and Furmston's Law of Contract, p 418) rightly observes:
'It must be stressed that, in this context, a man is taken to have known what would have been
obvious to a reasonable person in the light of the surrounding circumstances.'
The same view is echoed in 7 Halsbury's Laws of Singapore (2000) at [80.164]. The non-
mistaken party's appreciation that there is no real offer on the contract's literal terms
undermines the basis of the objective theory and necessarily imports the lack of subjective
intention on the part of the mistaken party.
[113] The English Court of Appeal in Commission for the New Towns v Cooper (Great
Britain)  Ltd [1995] 2 All ER 929, a case of common mistake, imported the concept of
Nelsonian knowledge and applied the framework of various categories of knowledge outlined
by Peter Gibson J in Baden v Société Generale pour Favoriser le Développement du
Commerce et de l' Industrie en France SA [1992] 4 All ER 161. While this case needs to be
treated with some caution, as it appears to integrate concepts of law and equity, I respectfully
agree with the approach in so far as it deals with deemed knowledge. It stands to reason that
if a party shuts its eyes to the obvious, the party is being neither honest nor reasonable, and
ought to be affixed with knowledge. It would be fair to say that such a person should not have
any legitimate expectation that the contract in question will be either respected or sanctioned
by court.
[114] For good measure, I should allude that the plaintiffs in their written submissions
concede that—
'in order to establish that mistake is operative at common law, the defendant has to show in
this instant case that the plaintiffs each had actual or constructive knowledge of the mistaken
pricing.' (My emphasis.)
The 'snapping up' cases
[115] There is a distinct line of cases within the narrow confines of unilateral mistake where
the common law has been resolutely disinclined to enforce apparent contracts. Hartog v
Colin & Shields [1939] 3 All ER 566 is incontrovertibly the leading authority in this area.
The defendants wanted to sell some hare skins to the plaintiffs. Unfortunately, they
mistakenly offered the price at so much per pound in place of so much per piece. All previous
discussions and negotiations between the parties proceeded on the basis of the price being
fixed at so much per piece. This was also the practice in the trade. It was found that the
plaintiffs must have known or realised that the offer did not express the true intention of the
defendants. The contract was held to be void because there was no consensus on the terms.
Singleton J held (at 568):
'The offer was wrongly expressed, and the defendants by their evidence, and by the
correspondence, have satisfied me that the plaintiff could not reasonably have supposed that
that offer contained the offerer's real intention. Indeed, I am satisfied to the contrary.' (My
emphasis.)
[116] The term 'snapping up' was aptly coined by James LJ in Tamplin v
[2005] 2 LRC 28 at 60James (1880) 15 Ch D 215 at 221. The essence of 'snapping up' lies in
taking advantage of a known or perceived error in circumstances which ineluctably suggest
knowledge of the error. A typical, but not essential defining, characteristic of conduct of this
nature is the haste or urgency with which the non-mistaken party seeks to conclude a
contract; the haste is induced by a latent anxiety that the mistaken party may learn of the error
and as a result correct the error or change its mind about entering into the contract. Such
conduct is akin to that of an unscrupulous commercial predator seeking to take advantage of
an error by an unsuspecting prey by pouncing upon it before the latter has an opportunity to
react or raise a shield of defence. Typical transactions are usually but not invariably
characterised by (a) indecent alacrity and (b) behaviour that any fair-minded commercial
person similarly circumstanced would regard as a patent affront to commercial fair play or
morality.
[117] It should be emphasised that this stream of authority is consistently recognised by all
the major common law jurisdictions. Despite the general views expressed in Taylor v
Johnson (1983) 151 CLR 422 on equitable mistake, it seems to be generally accepted in
Australia as well that this class of cases requires special mention and consideration. I drew
counsel's attention to 6 Halsbury's Laws of Australia (1992) at para 110–5550, which states:
'A particular class of case which illustrates unilateral mistake as to the terms intended, known
to the other party, is that in which an offer which would be very advantageous to the offeree
is “snapped up” by the offeree. The terms of the offer are clear and unambiguous and the
offeree accepts the offer according to its true sense, but it must have been obvious (and
known by the offeree)  that the offeror did not intend to make an offer in those terms.
Although a mistaken party will not often be able to discharge the onus of showing that the
other party knew or must have known that he or she intended terms different from the terms
of the offer or acceptance, it is not a necessary element that the party seeking to enforce the
contract has actively contributed to the other's mistake. The knowledge that the offer is not
meant according to its literal terms simply displaces the objective theory of contract.' (My
emphasis.)
[118] The Canadian courts have been the most active common law courts explicating and
developing this area of the law. In doing so, they appear to have also conflated equitable and
common law concepts. They have taken into account both the English and Australian
authorities in distilling the jurisprudence in this area. The decision of the British Columbia
Court of Appeal in 25659 BC Ltd v 456795 BC Ltd (1999) 171 DLR (4th) 470 at [25]–[26] is
instructive:
'[25] The law of mistake was discussed in depth by McLachlin CJBC in First City Capital
Ltd v BC Building Corp (1989) 43 BLR 29 (SC). After referring to a series of leading cases,
including the often quoted decision of Thomson J in McMaster University v Wilchar
Construction Ltd [1971] 3 OR 801 (Ont HCJ), Chief Justice McLachlin said at p 37: “One
circumstance falling clearly within the equitable jurisdiction of the Court
[2005] 2 LRC 28 at 61to relieve against mistake is that where one party, knowing of the
other's mistake as to the terms of an offer, remains silent and concludes a contract on the
mistaken terms: Solle, supra; Belle River Community Arena v WJC Kaufman Co (1978), 20
OR (2d) 447. A party may not 'snap at' an obviously mistaken offer: McMaster. It is not
necessary to prove actual knowledge on the part of the non-mistaken party in order to ground
relief, as in this context one is taken to have known what would have been obvious to a
reasonable person in the light of the surrounding circumstances: Hartog v Colin and
Shields [1939] All ER 566 (KBD); McMaster University; Stepps Investments, supra; Taylor,
supra. In summary therefore, the equitable jurisdiction of the Courts to relieve against
mistake in contract comprehends situations where one party, who knows or ought to know of
another's mistake in a fundamental term, remains silent and snaps at the offer, seeking to
take advantage of the other's mistake. In such cases, it would be unconscionable to enforce
the bargain and equity will set aside the contract.”
[26] I respectfully agree with the reasoning of Shaw J in Can-Dive Services Ltd v Pacific
Coast Energy Corp (1995) 21 CLR (2d) 39 (BCSC) where he said at 69–70 that: “While I
agree with what Madam Justice McLachlin said so far as it goes, I do not believe she
intended to imply that there must be a conscious taking advantage by one party of the other in
all cases. The element of constructive knowledge based upon what a reasonable person 'ought
to know' is premised upon that person not being conscious of the error. Thus, while the idea
of 'snapping up' may well apply in cases one side is aware of the other side's error, I do not
think it can be applied literally in the constructive knowledge cases. Rather, in my opinion,
constructive knowledge alone will suffice to invoke equity's conscience.” ' (Emphasis in
original; my underlining.)
[119] It is apparent from this overview that the Canadian courts have integrated through their
equitable jurisdiction the concept of common law mistake within the rubric of
unconscionability. This gives their courts a broad and elastic jurisdiction to deal with
commercially inappropriate behaviour. The leading Canadian decision in this area
is McMaster University v Wilchar Construction Ltd [1971] 3 OR 801, which, incidentally,
was cited with approval by the Australian High Court in Taylor v Johnson. Thompson J of
the Ontario High Court applied Hartog v Colin & Shields [1939] 3 All ER 566 and held that
the parties were not ad idem and found that no contract had been formed.
[120] The widening of jurisdiction to embrace a broad equitable jurisdiction could well
encourage litigious behaviour and promote uncertainty. This could account for the substantial
number of Canadian cases in this area of the law. This is in contrast to the English position
where after several decades Hartog v Colin & Shields still remains the locus classicus. There
are persuasive arguments against extending the litmus test of unconscionability to all
mistake-type situations. First, it is clear that the line of Australian and Canadian cases have
broadened their equitable jurisdiction on the strength of dicta attributable principally to Lord
Denning. It has been pointed out that the pedigree of these decisions is dubious, to say the
least (see paras [128]–[129], below). Secondly, widening the scope of mistake, unilateral
[2005] 2 LRC 28 at 62or otherwise, under the rubric of equitable mistake will, with its
malleability, only encourage uncertainty and litigation. It is germane to observe that none of
the cases purporting to follow Solle v Butcher [1949] 2 All ER 1107 have with any degree of
clarity defined the parameters of equitable mistake in contradistinction to a common law
mistake.

Cooper v Phibbs (1867)

This was an appeal from a decretal order of the Court of Chancery in Ireland, dismissing the
appellants' petition praying the court to rescind an agreement entered into by him dated 14
October 1863, whereby the appellant agreed to take the salmon fishery of Ballysodare, in the
county of Sligo, for three years, at £550 a year, on the ground of mistake, the fishery having
been in fact the property of the appellant.
In 1806 Sir Edward Crofton sold and conveyed the lands of Ballysodare, and the salmon
fishery and all other the fisheries of the river of Ballysodare to Joshua Edward Cooper, in fee.
Soon afterwards J E Cooper became a lunatic, and so continued till his death, in 1837, when
his nephew, Edward Joshua Cooper, succeeded to the property. By a private Act 1 Vict c 89,
which recited that all the estates, town lands, and fishery, were then vested in Edward Joshua
Cooper, he was authorized to make certain canals, reservoirs, and passages, for enabling the
salmon to ascend over certain cascades into the river and lakes above. Such passages for the
fish were made accordingly, and Edward Joshua Cooper died in 1863.
On 14 October 1863 the appellant, believing that the fishery had descended to the coheiresses
of Edward Joshua Cooper, took a lease from the trustee for these coheiresses of the fishery at
£550 a year for three years. The appellant, who was the nephew of the said Edward Joshua
Cooper, then discovered that under a settlement of 1827, which bound the fishery the said
Edward Joshua Cooper had been only tenant for life, and the appellant himself was entitled to
the inheritance. He then brought the present suit to set aside the agreement.
Further details are set out in the judgment of Lord Cranworth.
The Lord Chancellor of Ireland dismissed the petition of the appellant with costs, without
prejudice to any question between the parties with regard to the ultimate right to the fishery.
The Attorney-General and Giffard, QC, for the appellant.
Lawson, QC, and Sir R Palmer, QC, for the respondent.

31 MAY 1867LORD CRANWORTH:

My Lords, this is an appeal against a decree of the Lord Chancellor of Ireland, of 14 June
1865, dismissing a cause petition which had been filed by the appellant on 9 April 1864,
pursuant to the Chancery Regulation Act of 1850. The object of the petition was to be
relieved from an agreement dated on 14 October 1863, by which the petitioner agreed to
become tenant to the respondent, Phibbs, for three years, of the salmon fishery of
Ballysodare, in the county of Sligo. The ground of the relief asked was that the petitioner had
entered into an agreement in mistake as to his rights. He thought that the fishery belonged to
the other respondents for whom Phibbs acted as trustee, but he was in truth himself the owner
of the fishery as tenant thereof in tail. It is necessary to state shortly the title: For many years
previously to 1837, Joshua Edward Cooper, who was the great uncle of the appellant, had
been and then was seized in fee of large estates in the county of Sligo, which included the
town of Ballysodare, which is a town situate at or near the head of a bay or estuary, on the
north-west coast, called Ballysodare Bay. He was married but had no issue, and had very long
been a lunatic. His brother Edward Synge Cooper, his presumptive heir, had two sons,
Edward Joshua the eldest, and Richard Wordsworth the second. On the marriage of Edward
Joshua, the eldest, in 1827, with Miss Wynne, a settlement was executed to which Edward
Synge Cooper and his two sons were parties, the object of which was to settle the estates of
the lunatic, in case they should descend either on Edward Synge, his brother, or on either of
his nephews. There was no probability of the lunatic's recovery, or of his having issue. With
this object, Edward Synge Cooper covenanted with certain trustees named in the deed, that
if, inter alia, the estates in the county of Sligo, then vested in the lunatic, should on the
lunatic's death descend on him, the said Edward Synge Cooper, he would settle the same so
as to secure first a life interest to himself, and subject thereto and to certain provisions for the
intended wife, and the daughters, and younger children of the intended marriage, to the use of
Edward Joshua Cooper, his eldest son, for life, with remainder to his first and other sons in
tail male, with remainder to Richard Wordsworth Cooper for life, with remainder to his first
and other sons in tail male, and other remainders over to which it is not necessary to advert.
That deed was executed and the marriage took effect. Edward Synge Cooper, the brother and
presumptive heir of the lunatic died in the year 1830. Joshua Edward Cooper, the lunatic,
died intestate and without issue, in June 1837, and thereby all his estates descended on
Edward Joshua, his eldest nephew, the eldest son of Edward Synge Cooper, in fee, but
subject, however, to the covenants of the deed of 1827, under which he was equitable tenant
for life, with remainder subject to the charges of his first and other sons in tail male, with
remainder to his brother, Richard Wordsworth for life, with remainder to his first and other
sons in tail male. Edward Joshua, the eldest nephew of the lunatic, entered upon the property,
and held and enjoyed during his life. Richard Wordsworth, his younger brother, died in his
lifetime in 1850, leaving the appellant, his eldest son. In April 1863, Edward Joshua died
without male issue, so that the lands which had descended from the lunatic, and which were
affected by the covenants of 1827, passed to the appellant. Edward Joshua, though he left no
male issue, left five daughters, his coheiresses, all of whom are respondents. Among the
hereditaments of which the lunatic died seised in fee was a salmon fishery at the head of the
estuary called Ballysodare Bay, into which estuary, a little below the town of Ballysodare,
two rivers, the Arrow and the Owenmore, having previously united their waters, discharge
themselves. Although Edward Joshua certainly derived his title to this fishery by descent
from the lunatic, yet, for reasons which I will presently explain, he did not believe or admit
that it was affected by the trusts arising out of the settlement of 1827, and the covenants into
which he had entered. He supposed and so represented to his nephew, the appellant, that this
fishery was his own absolute property, to which he was entitled in fee simple. As the
appellant had succeeded to, amongst other things, all the property in the county of Sligo, it
was a great object with him to obtain possession of the fishery which his late uncle had so
represented as belonging to him in fee simple; and in order to obtain it he entered into a
negotiation with the respondent Phibbs, who acted as trustee for the other respondents, the
daughters and co-heiresses of Edward Joshua deceased, and agreed with him to become
lessee of the fishery for a term of three years.
A written agreement was accordingly drawn up, bearing date 15 October 1863. That
agreement is set out in the appendix. It is an agreement between Colonel Edward Cooper, the
appellant, of the one part, and William Phibbs, administrator of Edward Joshua Cooper, of
the other part, whereby Phibbs agrees to let, and Colonel Cooper agrees to take, for the term
of three years, to be computed from the first day of November next, the salmon fishery at
Ballysodare, county Sligo, together with the Rapids cottage, coach-house, and gate-house, at
the yearly rent of £550 sterling, to be payable half-yearly on every first day of May and first
day of November in each year. There are certain provisions as to keeping in repair, which it is
not necessary to advert to. In consequence, and by virtue of that agreement, the appellant
entered upon the fishery, and enjoyed it; but before any rent became due, that would be in
May 1864, he discovered, or thought he discovered, that he, and not the respondent, was the
person entitled to the fishery, and he filed his cause petition on 8 April 1864, praying to have
the agreement rescinded. The prayer of the petition is--"May it, therefore, please your
Lordships to decree and order that the said agreement between your petitioner and the said
William Phibbs be rescinded, and that the same be delivered up to be cancelled, and that a
perpetual injunction of this honourable court be issued to restrain the said William Phibbs
from suing at law upon or otherwise enforcing the said agreement, your petitioner
undertaking to submit to any terms which your Lordships shall think fit to impose.'' The
mistake, as the petitioner says, arose in this way. The Ballysodare property borders on and is
traversed by the two rivers which I have mentioned, the Arrow and the Owenmore, which
unite about a mile up above the town of Ballysodare, and so united fall into the estuary, about
a quarter of a mile below the town. The salmon were unable to get from the estuary up these
rivers by reason of ledges of rock obstructing the free passage up the river. This prevented the
fish from going up and depositing their spawn in the river higher up. It was important for the
owner of Ballysodare to get these obstacles removed, and it had been intended in the lifetime
of the lunatic to obtain Parliamentary powers enabling him to divert the course of the stream,
or rather the united stream, or otherwise to prevent the effect of these obstructions, and a bill
had been introduced for that purpose in the session of 1837, in the lifetime of the lunatic; but
while that bill was before Parliament the lunatic died, and the right to the fishery descended
on Edward Joshua, his eldest nephew. The bill was then altered by reciting the death of
Joshua Edward, and the powers intended to have been conferred on him were conferred upon
Edward Joshua. The Royal assent having been obtained to the bill, it became law on 30 June
1837. It is necessary very shortly to advert to the terms of that Act of Parliament. It begins by
reciting "whereas the rivers, the Arrow and Owenmore, rise from two large lakes in different
parts of the county of Sligo, in Ireland, and, after flowing through a very large tract of
country, unite their streams at about a mile above the town of Ballysodare, in the said county,
from whence they flow in the said channel to the Bay of Ballysodare, where by one mouth
they discharge their waters into the said Bay of Ballysodare at a distance of a furlong below
the said town, a considerable portion of their course between the said town and the sea being
interrupted by a series of ledges of rock, in passing over which their waters form a number of
cascades or waterfalls and where a number of salmon yearly congregate within the said Bay
of Ballysodare, and below the said waterfalls near the said mouth of the said united rivers, but
by reason of the said cascades or waterfalls they are prevented from ascending higher into the
said rivers and into the lakes connected therewith, so as to deposit their spawn in a safe part
of the same. Some of them, however, at high spring tides ascend the lower fall, but are unable
to ascend the continuing cascades or falls, from the shallowness of the water preventing them
from making their spring, and therefore they return again into the ocean." Then it recites that
the rivers and ledges in question are well adapted to invite the spawning of fish therein and to
protect the breeding of salmon, but no salmon fishery has or could have heretofore existed in
any part of the said rivers above the said waterfalls for the cause aforesaid. Then it goes on to
say, "and whereas a safe and commodious passage for the fish up the said rivers for the
purpose of their depositing their spawn therein, might be effected by the construction of
passages or watercuts on the eastern side of each of those places, whereas the aforesaid
ledges of rock obstruct the channels of such rivers, and whereas Sir Edward Crofton, Baronet,
by a certain deed executed by him and bearing date the 12th day of May, in the year of our
Lord 1806, granted and coveyed all his estate and interest in and of the said town and lands of
Knockmuldowny, otherwise Ballysodare aforesaid, comprising the entire eastern bank of the
said river below the said town, together with the salmon fisheries, and all other the fisheries
of Ballysodare, unto Joshua Edward Cooper," (that is, the lunatic), "who was the uncle of the
said Edward Joshua Cooper, and to his heirs and assigns for ever; and all which portion or
part of the said town or lands of Ballysodare, and fishery and rights of fisheries, the said
Joshua Edward Cooper, up to the time of his death, continued seised in fee simple, together
with a very large proportion of the lands through which the said rivers flow, particularly in,
about, and between the towns of Colooney and Ballysodare; and whereas the said Joshua
Edward Cooper" (that is, the lunatic) "did, after the said conveyance, and to the time of his
death, uninterruptedly exercise and enjoy the exclusive right of taking the salmon, which is as
aforesaid annually congregated within the mouths of the said united rivers, which after their
union are called the river of Ballysodare and also immediately below the waterfalls situate at
Ballysodare aforesaid; and whereas the said Joshua Edward Cooper died on or about 8 June
1837 intestate, whereby all the aforesaid estates, towns, lands, and fisheries, have descended
to, and are now vested, in the said Edward Joshua Cooper, who is the nephew and heir at law
of the said Joshua Edward Cooper; and whereas the said Joshua Edward Cooper is desirous
of constructing the said canals or watercuts at his own expense, on the terms that the
exclusive right of fishing for and the protection of salmon and other sea fish in the said rivers,
lakes, and bay, shall in consideration thereof be bested in and confirmed to the said Edward
Joshua Cooper, his heirs and assigns." Then, after certain recitals which are not important, it
enacts "That the said Edward Joshua Cooper, his heirs, and assigns, shall be, and he and they
are hereby fully authorized and empowered at his and their own proper costs and expenses,
and by his and their deputed agents, workmen, and servants, to divert and turn the waters of
the said rivers, by making, completing, and maintaining two canals, passages, or cuts, one
communicating with the said united rivers of Arrow and Owenmore, near the bridge of
Ballysodare, and extending forty-three perches, from the upper fall at Colooney to the foot of
the lower fall, and running at the back or west side of the town of Colooney, in such manner
as may be sufficient to effect the aforesaid object of enabling the said salmon to ascend into
the said rivers and lakes. Provided always that in making and completing the said canal,
passages, or cuts, the same shall be altogether situated on the estate and property of the said
Edward Joshua Cooper, and that no trespass be in any manner committed on or injury done to
the land of any other person or persons whomsoever." Then it is provided, also, that the
waters should not be diverted from their former course in such a manner as to injure the
mills; and then afterwards by the third section it enacts that it shall be lawful for Edward
Joshua Cooper, his heirs or assigns, and he is authorized to purchase from any person
incapacitated, etc their rights of salmon fishery in the bay. I think it is unnecessary to advert
particularly to any other part of the Act. Now Edward Joshua Cooper said, and probably truly
said, that under the powers of that Act he laid out large sums of money in improving and
purchasing up fishery rights in the bay amounting to between twenty and thirty, all of which
were conveyed to him in fee, and that the fishery was thus made very valuable. Edward
Joshua Cooper considered that under this Act, and by the outlay he made, he became owner
of the fishery in fee, and he so represented to the appellant. He continued in possession till his
death, which happened in April 1863, and the question would then arise as to his title. If he
was, as he supposed and represented himself to be, seised in fee for his own use and benefit,
then on his death the right of the fishery descended on his five daughters, the now
respondents. But if the fishery, like the rest of the Ballysodare property, was subject to the
covenants of 1827, then it passed to the appellant. The first question therefore is, did the deed
of 1827 extend to and comprehend this fishery? Now the fishery was conveyed to the lunatic
by a person of the name of Crofton on 12 May 1806, with the towns and lands of
Ballysodare. It was there described thus--all that and those the town and lands of
Knockmuldowny, otherwise Ballysodare, together with the tolls and customs of the fairs and
markets thereof, and the salmon fisheries, and all other the fisheries of the rivers commonly
called the river of Ballysodare, or by whatever name or names the said town, lands, and other
premises, or any of them is or are called. That is the description in the conveyance of Joshua
Edward, the lunatic. That description, however, was not adopted in the description of the
parcels as they were settled in 1827. The parcels are there merely described as the towns of
Ballysodare, otherwise Knockmuldowny, with certain appurtenances connected with it, but
then it goes on to say that the covenant is to extend to all other estates of inheritance whereof
the said Joshua Edward Cooper shall die seised or possessed of, or as many of them as shall
descend in the manner therein mentioned. Now, although the description of the parcels does
not in terms mention the fisheries, yet inasmuch as the fishery certainly was an hereditament
of which Joshua Edward was seised in fee, and that is expressly stated in the Act of
Parliament, it seems perfectly clear that that deed must have extended to the fishery under the
general words of "all other estates of inheritance and hereditaments." But the court below, it
appears, thought that the fishery was not intended to be included, and the first question one
would put upon that is, why they should say it was not intended to be included. It is certainly
included in the general words; and I do not think your lordships are at liberty to speculate as
to the probability of what the parties intended to include, if they have used words which
actually include it. That seems to be a conclusive answer to the suggestion. I must say further
that if we were at liberty to speculate, I think that anything less probable than that the parties
could have intended to settle the lands and not to include the fishery can hardly be imagined.
It is to be recollected that at the time this deed was entered into no such question as now
arises on the fact that the settlor, Edward Joshua, had only female issue and no male issue had
arisen. He was going to be married, and it was just as probable that he should have male issue
as that he should have female issue. Therefore the improbability seems to be excessive that
they could have meant to settle the lands and not to settle the fishery. I just make these
remarks upon the question of probability; at the same time that is not a matter which we are
entitled to enter into any speculation about, because it is quite clear that under the general
words the fishery was included. The consequence was that the present appellant, when he
entered ,into the agreement after the death of his uncle to take a lease of this property, entered
into an agreement to take a lease of what was in truth his own property, for in truth this was
bound by the covenant, and belonged to him just as much as the lands of Ballysodare
belonged to him. Therefore he says, I entered into the agreement under a common mistake,
and I am entitled to be relieved from the consequences of it. In support of that proposition he
relied upon a case which was decided in the time of Lord Hardwick--not by Lord Hardwick
himself, but by the then Master of the Rolls--Bingham v Bingham (1748, 1 Ves Sen 126),
where that relief was expressly administered. I believe that the doctrine there acted upon was
perfectly correct doctrine, but even if it were not, that will not at all show that this appellant is
not entitled to this relief, because in this case the appellant was led into the mistake by the
representations made to him by his uncle, who is now represented by the respondents. It is
stated by him in his cause petition, which is verified, and to which there is no contradiction;
and in all probability it seems to be the truth that his uncle told him, not intending, no doubt,
to misrepresent anything, that he was entitled to this fishery as his own fee simple property;
and the appellant, his nephew after his death, acting on the belief in the truth of what his
uncle had so told him, entered into this agreement in question. It appears to me, therefore,
that it is impossible to say that he is not entitled to the relief which he asks, namely, to have
the agreement delivered up, and the rent repaid. That being so he would be entitled to relief,
but he is entitled to relief on certain terms, to which I will presently advert. Before I do so I
must advert to an argument which was relied on very much by the respondents, namely, that
the fishery conveyed in 1806 by Sir Edward Crofton was not the fishery in the estuary, but
only in the rivers, and that, consequently, the nephew, Edward Joshua, had no right whatever
in that fishery, under that descent from his uncle. I cannot think that there is any foundation
for this suggestion, because the Act of Parliament expressly states that the fishery in the
estuary and at the mouths of the rivers had descended from the lunatic uncle upon Edward
Joshua. But even if it had been so, in my opinion it would not have made the least difference,
for the right of fishing in rivers traversing in lands is an incident to the right of property, and
that property was certainly governed by the covenant of 1827. The argument on the part of
the respondents is, that the right to make the new cuts conferred by the statute conferred a
new right, and that that was a new right granted to Edward Joshua in fee. I do not think that
that was a new construction of the Act; but if it were, it would be a right which Edward
Joshua obtained by virtue of his right to the lands and the fishing in the fresh waters. As to
that right he stood in a fiduciary relation to those interested under the deed of 1827. But for
his right under that instrument he could not have obtained the powers conferred by the Act. In
my opinion the very same doctrine which is acted upon so continually, that a tenant for life of
a renewable property, if he renews it, cannot, by possibility, do so for his own benefit, applies
in principle to this case. If the facts had been such as the respondents contend they were,
namely, that he was the owner in fee simple under the Act of Parliament, and that the
property was governed by the covenants of 1827, and even if it were not governed by those
covenants he stood m a fiduciary character, which disqualified him from making any such
contention as that. Therefore, quâcunque viâ it is clear to my mind that the appellant is
entitled to the relief he asks by getting rid of this agreement. Then the next question is, what
are the terms upon which the relief is to be given? Now, the respondents allege that their
father, Edward Joshua, in making the canals and other works necessary for establishing the
fishery, and also in purchasing up fishery rights in the bay, expended very large sums of
money. First of all he was at the expense of obtaining the Act of Parliament. It was intended
that the Act of Parliament should be passed in his lifetime, but the lunatic having died it was
treated as being from the beginning his expenditure. He was at great expense at purchasing up
the rights of fishery of twenty or thirty proprietors on the banks, and he was at very large
expense in making cuts and removing obstructions, so as to make the fishery available. That,
at least, is the allegation of the respondents. Now, if that be so, the question is upon what
terms this relief ought to be granted. It is impossible to decide the merits of this claim in the
absence of the persons entitled to the corpus of the estate. On the marriage of the appellant in
1858 the property was settled to uses, and on trusts for the benefit of the appellant and his
wife and the issue of the marriage. The appellant, therefore, has not brought before the court
all the persons interested in this question. If the respondents succeed in establishing their lien
it will be a lien affecting the life interest of the appellant as well as the rest of the corpus of
the property, and so justice would not be done to them if we were to give relief to the
appellant by simply setting aside the agreement on which they claim a lien. They have a right
to have that question disposed of. I submit to your Lordships, therefore, that all we can do is
to remit the case to the Court of Chancery, in Ireland, with a declaration which shall enable
the parties to have this question properly decided. The declarations that I would suggest to
your Lordships as the proper ones to be made are these--to declare that the lands and
hereditaments conveyed to Joshua Edward Cooper, by the deeds of 1806, including the
fishery of Ballysodare, were comprised in the settlement of 13 February 1827, and were
bound by the covenant of Edward Joshua Cooper therein contained; and that at the time of the
passing of the Act of Parliament, 1 Vict c 89, the said Edward Joshua Cooper was a trustee of
the lands, hereditaments, and fisheries of Ballysodare, for the persons entitled under the trusts
of the aforesaid settlement of 1827, and that the rights, powers, and interests granted to the
said Edward Joshua Cooper, his heirs and assigns, by the said Act of Parliament, must be
deemed to have been taken by him as a trustee for the persons entitled, under the settlement
of 1827, including himself as tenant for life; and that all the estates, rights, and interest
acquired by the said Edward Joshua Cooper, under and by virtue of the said powers and the
canal and works made and constructed by him by virtue of the said Acts, were acquired,
made, and held by him in like manner in trust for himself and the other persons entitled under
the said settlement of 1827; and further declare that the lands and fisheries of Ballysodare
were also comprised in the settlement of 6 August 1858, and that under and by virtue of the
said several settlements the appellant was, at the time of the making of the agreement of 14
October 1863, in his petition mentioned, entitled, as tenant for life, to the said lands and
fishery of Ballysodare, including ,therein the rights and interest and works acquired and made
by the said Edward Joshua Cooper as aforesaid, save and except only the piece of land
demised by the deed of 27 September, 1858, and the buildings thereon (that alludes to a lease
that was granted, the details of which I have forgotten to allude to, but it is immaterial to this
question); and further declare that the aforesaid agreement of 14 October, 1863, in the said
petition mentioned, was made and entered into by the parties to the same, under mistake, and
in ignorance of the actual existing rights and interest of such parties in the said fishery; and
further declare, that the said agreement is not in equity binding upon the appellant and
respondents, but ought to be set aside subject to the appellant paying to the respondents, a
proper occupation rent for the said excepted piece of land and cottage, to be ascertained by
the Master in the usual manner, and subject also, as hereinafter is mentioned, that is to say,
the respondents claiming to have a lien on the said fishery, on account of the moneys said to
have been expended by the said Edward Joshua Cooper in obtaining the said Act, and in
purchasing the said rights of fishery, and in making and improving the same. Let the said
petition stand over for six months, with liberty for the appellant to bring before the court, by
supplemental petition, all persons interested with respect to the said claim, and refer it back to
the court to do as may be just, the supplemental petition having regard to the aforesaid
declaration; and if the appellant shall fail to file such supplemental petition within the period
aforesaid, or such further period as may be allowed by the court, then let the present appeal
be dismissed with costs. Upon these grounds I move your Lordships that the decree below
should be reversed subject to these declarations.
LORD WESTBURY:
My Lords, for the purpose of determining the question raised by this cause petition, it is
necessary to ascertain the rights and interests of the parties at the time of making it. Now it is
clear I think beyond the possibility of argument, that the hereditaments which constitute the
estate of Ballysodare, including the fishery, were comprised in the covenant and agreement of
Edward Synge Cooper and Edward Joshua Cooper, contained in the settlement of 1827. That
settlement plainly indicates in every part of it the agreement of the parties to include all the
estates that should descend from the lunatic Joshua Edward Cooper. First, with regard to the
annuity given as a provision for Edward Joshua Cooper, it is charged on all the estates on all
and every the other estates of Joshua Edward Cooper, situate in the County of Sligo, not
comprised in two indentures which are therein specified, and then the covenant and
agreement comprehend all other the estates of inheritance whereof the lunatic Edward Joshua
Cooper should die seised. The effect therefore of this extent of the deed of 1827, was to make
Joshua Edward Cooper at the time of the obtaining of the Act of Parliament, of the 1st of
Vict, a trustee in fee seised of the legal estate in fee, for the parties entitled under the uses of
trust of that settlement. Now I must impute if necessary to Edward Joshua Cooper the
intention of stating the truth of the fact to the Legislature. When therefore I find in this Act of
Parliament, a recital that this fishery together with the other hereditaments on the death of the
lunatic descended to Edward Joshua Cooper in fee, that must be taken to represent to
Parliament that the trust estate so descended. Your Lordships are bound to impute to Edward
Joshua Cooper, honestly and integrity of purpose, and therefore you cannot for a moment
assume that he intended to conceal from the Legislature the fact of the property being bound
by the trusts of the settlement. You must take the recital contained in the Act of Parliament as
a recital intended to denote the descent of the legal estate in fee, held by him upon trust, and
you cannot impute to him an intention of representing to Parliament that it was his own
property; because you cannot for a moment suppose that he was ignorant of the agreement of
contract contained in that deed, or that he intended to repudiate the obligation which he had
contracted under that deed. Then if it be taken that he stood before Parliament as a trustee, the
powers and authorities conferred upon him by that Act of Parliament, are conferred upon him
in his character as trustee. They are attached to the ownership in fee, which he represents
himself to have had, and as that ownership was subject to the trust, the powers and authorities
attached to the ownership are in like manner subject to the obligation of that trust, and the
things acquired by virtue of those powers and authorities would also be subject to the trusts
which affected the individual who becomes the Parliamentary donee of those powers. There
can be no doubt for a moment, therefore, with regard to the settled principles of equity that
what was given to him was given to him in the character of owner in trust for the other
persons, and what was acquired by him by virtue of those powers became also subject to that
trust. The result, therefore, is that all he acquired by virtue of the Parliamentary powers would
become subject to the trust of the settlement of 1827, subject only to the repayment of him by
the parties entitled under those trusts of the moneys properly expended by him in acquiring
the additional rights of fishery. The Act of Parliament contemplates that there would be one
fishery only, a fishery constituted by the original rights of the fishery of Ballysodare, and
augmented and improved by gathering in other rights of fishery extending over the shore of
the Bay, which he had the power of acquiring, so that there might be one large profitable
fishery. Now the fishery in point of fact ends with the estuary, and with the beginning of the
cut, because the cut or canal was intended only to improve the fishery, I might almost even
say to continue the fishery, because we well know that there can be no fishery from the resort
of salmon unless the salmon have the means of ascending to the breeding grounds in the
higher waters, and they resort to the same place only when they have that opportunity. One
fishery, therefore, was constituted by virtue of those powers, and that fishery was again
conveyed by the settlement of 1858, under which the present petitioner is tenant for life. The
result, therefore, is that at the time of the agreement for the lease, which it is the object of this
petition to set aside, the parties dealt with one another under a mutual mistake of their
respective rights. The petitioner did not suppose that he was what in truth he was, tenant for
life of the fishery. The other parties acted upon the impression given to them by their father
that he was the owner of the fishery, and that the fishery had descended to them. In such a
state of things there can be no doubt of the rule of a court of equity with regard to the dealing
with that agreement. It is said, Ignorantia juris haud excusat, but in that maxim the
word jus is used in the sense of denoting general law--the ordinary law of the country; but
when the word jus is used in the sense of denoting a private right, that maxim has no
application. Private right of ownership it is a matter of fact; it may be the result also of matter
of law; but if parties contract under a mutual mistake and misapprehension as to their relative
and respective rights, the result is that that agreement is liable to be set aside as having
proceeded upon a common mistake. Now that was the case with these parties. The
respondents believed themselves to be entitled, the petitioner believed that he was a stranger
to the property; the mistake is discovered, and the agreement cannot stand. But then when the
appellant comes here to set aside the agreement, an obligation lies upon him so to constitute
his suit, as to enable a court of equity to deal with the whole of the subject matter, and once
for all to dispose of the rights and interests of the parties in the settlement. Now although the
agreement was inoperative, for the purpose of giving to the petitioner a valid lease of the
property, yet it might operate to this extent, that so far as the respondents had in equity a lien
upon the property, their estates and interests in respect of that lien might be affected by the
agreement; and there is another particular also which must be noticed, which, for the
moment, I think, in the preparation of these minutes, has escaped our attention, namely, that
unquestionably the respondents were entitled to the cottage and to the piece of land upon
which no rent has been paid; but during the time that has elapsed I understand the fact to be
that the petitioner has had the possession and enjoyment of that cottage and of that piece of
land. In respect of those particulars, therefore, a proper occupation rent ought to be paid by
him. What then are the rights and interests of the parties which ought to be ascertained? They
are, as I have already observed, the sum of money due to the respondents, and charged upon
the property as being the expenditure of their father, the benefit of which the petitioner, as
tenant for life, has enjoyed. Now, no doubt, that expenditure constitutes a lien or charge in the
nature of a mortgage charged upon the property. It must be ascertained, and an obligation lies
upon the present appellant to give the court the means of ascertaining it. That is the reason,
therefore, why the decree is proposed to be put in the form which your Lordships have heard,
viz that although a declaration is made in order to show the basis upon which the opinion of
the House is founded, with respect to the validity of the agreement, yet the House stops short
of giving positive relief, except on the terms imposed on the petitioner, to which, in reality,
by the prayer of his petition, he submits, of giving an opportunity to the respondents of
ascertaining the full measure of their rights and interests, in order that complete justice may
be done, by declare that they will be entitled to a charge for the principal money so
ascertained, and to interest thereon at the rate of four per cent from the time of the death of
their father, Edward Joshua Cooper, who was the last person in possession of the fishery
antecedent to the title of the present appellant, and declaring also (which must be added to
that) that they are entitled to an occupation rent during the time that the present appellant has
been in the possession and enjoyment of the cottage and the piece of land. My Lords, these
terms, I have very little doubt, will be submitted to by the petitioner, because they are
consistent with the willingness which he has expressed in petition to have the whole of the
rights ascertained, and if that be done, and if he brings before the court, by supplemental
cause petition, the parties who are interested in the ascertainment of those rights, the subject
will be disposed of. But if he does not do so, then he has brought forward an insufficient and
incomplete petition, upon which full equity and full relief cannot be given, and the only result
must be that his petition to the court below ought to be discussed upon quite different
grounds. I regret to find that observations have been made in the court below, though I cannot
at all suppose that they were the ratio decidendi, that upon some extrinsic evidence it
appeared to the court below that the fishery was not intended to be comprised. When there is
no application to correct an instrument, or to set aside an instrument, the intention of the
parties is to be collected from the words they have used, and no words can be more pertinent
or more comprehensive than the words in the settlement of 1827, and the words in the
settlement of 1858, to denote the intention of including the fishery in the provisions of those
deeds, and making it subject to the trusts which are thereby created.
LORD COLONSAY:
My Lords, I do not think it necessary to add anything to the observations which have been
made by my noble and learned friends. I entirely concur with the views which have been
taken as to the relative rights of the parties in this case, and I think that the course which has
been suggested for doing justice between them in regard to those relative rights is the one
best calculated to attain that end.
Decretal order reversed, and cause remitted with a declaration.
Couturier v Hastie (1856)
A cargo of corn was shipped by A at Salonica in February 1848, for delivery in London. On
May 15 it was sold by H a factor, who made the sale on a del credere commission. The
contract described the corn as ‘of average quality when shipped,’ and the sale was made at
‘275 per quarter free on board, and including freight and insurance to a safe port in the United
Kingdom, payment at, etc, upon handling shipping documents.’ In fact the corn had, a short
time before the date of the contract, been sold at Tunis, in consequence of getting so heated in
the early part of the voyage as to render its being brought to England impossible. The
contract in England was entered into in ignorance of this fact. When the English purchaser
discovered it, he repudiated the contract. In an action for the price brought against the factor:
Held the contract contemplated that there was an existing something to be sold and bought
and capable of transfer, which not being the case at the time of the sale by the factor, he was
not liable.
Cundy v Lindsay (1878)
The purchaser of a chattel takes it, as a general rule, subject to what may turn out to be
informalities in the title.
By a purchase in market overt the title obtained is good against all the world.
If not so purchased, though purchased bonâ fide, the title obtained may not be good against
the real owner.
Where the original owner has parted with the chattel to A. upon a de facto contract, though
there may be circumstances which enable that owner to set aside that contract, the bonâ
fide purchaser from A. will obtain an indefeasible title.
The question, therefore, in many such cases will be, was there a contract between the original
owner and the intermediate person.
L. was a manufacturer in Ireland; Alfred Blenkarn, who occupied a room in a house looking
into Wood Street, Cheapside, wrote to L., proposing a considerable purchase of L.'s goods,
and in his letter used this address - "37, Wood Street, Cheapside," and signed the letters
(without any initial for a christian name) with a name so written that it appeared to be
"Blenkiron & Co." There was a respectable firm of that name, "W. Blenkiron & Co," carrying
on business at 123, Wood Street. L. sent letters, and afterwards supplied goods, the letters, the
goods, and the invoices accompanying the goods, being all addressed to "Messrs. Blenkiron
& Co., 37, Wood Street." The goods were received by Blenkarn at that place, and disposed of
to the Defendants, who were entirely ignorant of the fraud:-
Held, that no contract was made with Blenkarn, that even a temporary property in the goods
never passed to him, so that he never had a possessory title which he could transfer to the
Defendants, who were consequently liable to the Plaintiffs for the value of the goods.

Foster v Mackinnon (1869)

The defendant was induced to put his name upon the back of a bill of exchange by the
fraudulent representation of the acceptor that he was signing a guarantee. In an action against
him as indorser at the suit of a bonâ fide holder for value, the jury were directed that, "if the
defendant's signature to the document was obtained upon a fraudulent representation that it
was a guarantee, and the defendant signed it without knowing that it was a bill, and under the
belief that it was a guarantee, and if he was not guilty of any negligence in so signing the
paper, he was entitled to the verdict:"-
Held, a proper direction.
BYLES, J. This was an action by the plaintiff as indorsee of a bill of exchange for 3000l.,
against the defendant, as indorser. The defendant by one of his pleas traversed the
indorsement, and by another alleged that the defendant's indorsement was obtained from him
by fraud. The plaintiff was a holder for value before maturity, and without notice of any
fraud.

There was contradictory evidence as to whether the indorsement was the defendant's
signature at all; but, according to the evidence of one Callow, the acceptor of the bill, who
was called as a witness for the plaintiff, he, Callow, produced the bill to the defendant, a
gentleman advanced in life, for him to put his signature on the back, after that of one Cooper,
who was payee of the bill and first indorser, Callow not saying that it was a bill, and telling
the defendant that the instrument was a guarantee. The defendant did not see the face of the
bill at all. But the bill was of the usual shape, and bore a stamp, the impress of which stamp
was visible at the back of the bill. The defendant signed his name after Cooper's, he the
defendant (as the witness stated) believing the document to be a guarantee only.

The Lord Chief Justice told the jury that, if the indorsement was not the defendant's signature,
or if, being his signature, it was obtained upon a fraudulent representation that it was a
guarantee, and the defendant signed it without knowing that it was a bill, and under the belief
that it was a guarantee, and if the defendant was not guilty of any negligence in so signing the
paper, the defendant was entitled to the verdict. The jury found for the defendant.

A rule nisi was obtained for a new trial, first, on the ground of misdirection in the latter part
of the summing-up, and secondly, on the ground that the verdict was against the evidence.
As to the first branch of the rule, it seems to us that the question arises on the traverse of the
indorsement. The case presented by the defendant is, that he never made the contract declared
on; that he never saw the face of the bill; that the purport of the contract was fraudulently
misdescribed to him; that, when he signed one thing, he was told and believed that he was
signing another and an entirely different thing; and that his mind never went with his act.

It seems plain, on principle and on authority, that, if a blind man, or a man who cannot read,
or who for some reason (not implying negligence) forbears to read, has a written contract
falsely read over to him, the reader misreading to such a degree that the written contract is of
a nature altogether different from the contract pretended to be read from the paper which the
blind or illiterate man afterwards signs; then, at least if there be no negligence, the signature
so obtained is of no force. And it is invalid not merely on the ground of fraud, where fraud
exists, but on the ground that the mind of the signer did not accompany the signature; in other
words, that he never intended to sign, and therefore in contemplation of law never did sign,
the contract to which his name is appended.

The authorities appear to us to support this view of the law. In Thoroughgood's Case (1) it
was held that, if an illiterate man have a deed falsely read over to him, and he then seals and
delivers the parchment, that parchment is nevertheless not his deed. In a note to
Thoroughgood's Case (1), in Fraser's edition of Coke's Reports, it is suggested that the
doctrine is not confined to the condition of an illiterate grantor; and a case in Keilwey's
Reports (2) is cited in support of this observation. On reference to that case, it appears that
one of the judges did there observe that it made no difference whether the grantor were
lettered or unlettered. That, however, was a case where the grantee himself was the
defrauding party. But the position that, if a grantor or covenantor be deceived or misled as to
the actual contents of the deed, the deed does not bind him, is supported by many authorities:
see Com. Dig. Fait (B. 2); and is recognized by Bayley, B., and the Court of Exchequer, in
the case of Edwards v. Brown. (3)
Accordingly, it has recently been decided in the Exchequer Chamber, that, if a deed be
delivered, and a blank left therein be afterwards improperly filled up (at least if that be done
without the grantor's negligence), it is not the deed of the grantor: Swan v. North British
Australasian Land Company. (1)

These cases apply to deeds; but the principle is equally applicable to other written contracts.
Nevertheless, this principle, when applied to negotiable instruments, must be and is limited in
its application. These instruments are not only assignable, but they form part of the currency
of the country. A qualification of the general rule is necessary to protect innocent transferrees
for value. If, therefore, a man write his name across the back of a blank bill-stamp, and part
with it, and the paper is afterwards improperly filled up, he is liable as indorser. If he write it
across the face of the bill, he is liable as acceptor, when the instrument has once passed into
the hands of an innocent indorsee for value before maturity, and liable to the extent of any
sum which the stamp will cover.

In these cases, however, the party signing knows what he is doing: the indorser intended to
indorse, and the acceptor intended to accept, a bill of exchange to be thereafter filled up,
leaving the amount, the date, the maturity, and the other parties to the bill undetermined.

But, in the case now under consideration, the defendant, according to the evidence, if
believed, and the finding of the jury, never intended to indorse a bill of exchange at all, but
intended to sign a contract of an entirely different nature. It was not his design, and, if he
were guilty of no negligence, it was not even his fault that the instrument he signed turned out
to be a bill of exchange. It was as if he had written his name on a sheet of paper for the
purpose of franking a letter, or in a lady's album, or on an order for admission to the Temple
Church, or on the fly-leaf of a book, and there had already been, without his knowledge, a bill
of exchange or a promissory note payable to order inscribed on the other side of the paper. To
make the case clearer, suppose the bill or note on the other side of the paper in each of these
cases to be written at a time subsequent to the signature, then the fraudulent misapplication of
that genuine signature to a different purpose would have been a counterfeit alteration of a
writing with intent to defraud, and would therefore have amounted to a forgery. In that case,
the signer would not have been bound by his signature, for two reasons, - first, that he never
in fact signed the writing declared on, - and, secondly, that he never intended to sign any such
contract.

In the present case, the first reason does not apply, but the second reason does apply. The
defendant never intended to sign that contract, or any such contract. He never intended to put
his name to any instrument that then was or thereafter might become negotiable. He was
deceived, not merely as to the legal effect, but as to the actual contents of the instrument.

We are not aware of any case in which the precise question now before us has arisen on bills
of exchange or promissory notes, or been judicially discussed. In the case of Ingham v.
Primrose (1), and the case of Nance v. Lary (2), both cited by the plaintiff, the facts were very
different from those of the case before us, and have but a remote bearing on the question. But,
in Putnam v. Sullivan, an American case, reported in 4 Mass. 45, and cited in Parsons on
Bills of Exchange, vol. i. p. 111, n., a distinction is taken by Chief Justice Parsons between a
case where an indorser intended to indorse such a note as he actually indorsed, being induced
by fraud to indorse it, and a case where he intended to indorse a different note and for a
different purpose. And the Court intimated an opinion that, even in such a case as that, a
distinction might prevail and protect the indorsee.
The distinction in the case now under consideration is a much plainer one; for, on this branch
of the rule, we are to assume that the indorser never intended to indorse at all, but to sign a
contract of an entirely different nature.

For these reasons, we think the direction of the Lord Chief Justice was right.

With respect, however, to the second branch of the rule, we are of opinion that the case
should undergo further investigation. We abstain from giving our reasons for this part of our
decision only lest they should prejudice either party on a second inquiry.

The rule, therefore, will be made absolute for a new trial.

Rule absolute.
Frederick E Rose v William H Pimm (1953)
The plaintiffs, London merchants, were asked by their Egyptian house for "Moroccan
horsebeans described here us feveroles." Their representative did not know What feveroles
were, and asked the defendants' representative, Who after making inquiries, told him that
feveroles were just horsebeans and that his firm could procure them. After negotiations on
that basis, written contracts were concluded (1) between North African suppliers and the
defendants, (2) between the defendants and the plaintiffs, and (3) between the plaintiffs and
Egyptian buyers, for the sale and purchase of "horsebeans," payment to be in London by
confirmed irrevocable letters of credit against shipping documents. When the horsebeans,
shipped from Tunis, were received by the Egyptian buyers, the latter found that the
commodity supplied was not feveroles, but another type of bean; but as they had paid for the
goods, they accepted them and claimed damages.
The resulting disputes between the plaintiffs and the defendants were referred to arbitration,
and awards made in favour of the defendants. The plaintiffs then started proceedings in the
High Court, claiming, inter alia, rectification of the contracts by the addition of The word
"feveroles" after the word "horsebeans," intending if successful to claim damages on the
contracts as rectified.
Pilcher J. found that both parties had made an oral agreement by which they intended to deal
in "horsebeans of the feverole type," but that owing to a mutual mistake innocently induced
by the sellers' representative, all the written contracts were for horsebeans; and he allowed the
rectification asked for by the plaintiffs. On appeal by the defendants:-
Held, that, as the concluded oral agreement between the parties was for horsebeans, and the
written contracts were in the same terms, the remedy of rectification, available only where
there was clear proof that a written agreement did not correspond with the contract into which
the parties entered, as expressed by their outward acts, was not available to make new
contracts for feveroles between the parties.
Per Denning L.J.: Though both parties were under a fundamental mistake as to the nature of
the subject-matter, the contract was not a nullity, for where parties to a contract wore to all
outward appearances in full and certain agreement, neither of them could set up his own
mistake, or the mistake of both of them, to make it a nullity ab initio.
Dictum of Simonds J. in Crane v. Hegeman-Harris Co. Inc. [1939] 1 All E.R. 662, 664, that
a continuing common intention might be sufficient ground for obtaining rectification doubted
by Denning L.J.
Decision of Pilcher J. [1953] 1 Lloyd's Rep. 84 reversed.
Extra notes
[DENNING L.J. Kennedy's case6 was decided before equity was joined with law. The rule
now is that one can have rescission for material misrepresentation; but it does not affect this
argument, for rectification is never a remedy for innocent mistake.]
Here there was an innocent mistake as to the quality of the commodity. Two remedies were
available: (1) rescission - and if the parties had discovered the mistake in time the buyers
could have rescinded. But the Egyptians kept the goods so that rescission was not possible; or
(2) damages for breach of collateral warranty; but that plea was abandoned by the plaintiffs.
The authorities do not show that rectification is a remedy here. If the court were to decide that
Pilcher J. was right, it would be making new law in the case of innocent misrepresentation,
and it would mean that for more than a century the legal profession has been under a
misapprehension as to the remedies for such misrepresentation. It has always been thought
that the only remedy is to strike swiftly and rescind while the contract is still executory; but if
the present decision is right, one can wait five-and-a-half years and then apply to rectify and
later get damages on the contract as rectified.
Where rectification is sought, the duty of the court is to rectify written instruments to bring
them into accord with a prior oral contract, and the inquiry to which the court directs its mind
is: did the parties at the time when they signed the written agreement intend to carry out the
prior oral agreement, or had they changed their minds? Pilcher J. referred with approval to
Simonds J. in Crane v. Hegeman-Harris Co. Inc.,7 citing Clauson J. in Shipley Urban
District Council v. Bradford Corporation.8 Clauson J. held that an agreement in writing
could be rectified where there was a prior oral contract, made by a public authority, which
was void unless it was in writing. The question there was whether agreement. But that point
cannot arise here, for there was here a concluded prior oral agreement, and the question is
what that agreement was. Either there was a contract for horsebeans or no contract at all:
see per Lord Cozens-Hardy M.R. in Lovell & Christmas Ld. v. Wall9 on the essence of
rectification, and per Fletcher-Moulton L.J.10 on the point that the law does not make new
contracts for the parties. Thus, unless a mistake is proved, there is nothing to rectify. See
also Craddock Brothers v. Hunt, per Warrington L.J.,11 on "the real antecedent contract";
and United States of America v. Motor Trucks Ld.,12 per Lord Birkenhead L.C., on
rectification owing to common mistake where the written contract does not express the true
bargain.
[DENNING L.J. There was no prior contract to supply feveroles if they are different from
horsebeans.]
The parties negotiated and came to a verbal agreement on the basis that the two things were
the same. They did not come to two agreements. If the two things are in fact different, they
cannot rectify.
Kenneth Diplock Q.C., Eustace Roskill Q.C., A. J. Bateson and J. H. A. Scarlett for the
plaintiffs. The case was pleaded on construction of the contract and rectification.
[DENNING L.J. Why did the plaintiffs abandon their claim for breach of collateral
warranty?]
Because the warranty contradicted the express terms of the written contract, and where there
is a contract for the sale of goods by description and there has been a parole warranty that
those goods will comply with another description, which varies, modifies or contradicts the
written contract, parole evidence as to the negotiations between the parties is not admissible
if the oral agreement has been embodied in the written document: see Smith v. Jeffryes,13
which is closely analogous to this case. There was there a common intention to deal in
Regent's Ware potatoes and an oral agreement to supply them, but the written contract
omitted the word "Regent's" and, on appeal, the court refused to admit parole evidence of the
common intention.
The important element was common intention, as it is here; and, short of fraud, it mattered
not how that intention was induced. The court in Lovell & Christmas Ld. v. Wall14
mentioned the same difficulty as to the inadmissibility of parole evidence in those
circumstances.
[DENNING L.J. So the plaintiffs abandoned the collateral warranty plea on the analogy
of Smith v. Jeffryes15?]
Yes, and many other decisions since that. While it is appreciated that rectification is a
discretionary remedy, it is submitted that the plaintiffs here had no other remedy.
[MORRIS L.J. Is it submitted that in Smith v. Jeffryes15 the contract might have been
rectified today by inserting the word "Regent's" on the jury's finding that that was the parties'
intention?]
Yes; those are the circumstances in which rectification is the remedy, and the only remedy.
This case turns on a question of fact: was there a common intention to sell horsebeans which
would comply in Egypt with the description "feveroles"? Pilcher J. has found that there was
that common intention: see Crane v. Hegeman-Harris Co. Inc.,16 which correctly laid down
the law as to the remedy of rectification; and Simonds J.'s judgment, cited by Pilcher J., was
confirmed in the Court of Appeal.17
[SINGLETON L.J. But if it is shown that the market clerks made a mistake, are the plaintiffs
entitled to rectification as of right, when both parties know that there is a string of contracts
and that other parties up and down the line will be affected? See Lord Hardwicke L.C.
in Henkle v. Royal Exchange Assurance Co.18 as to whether the court ought to interpose and
relieve by rectifying "under the circumstances and nature of the trade."]
In the absence of estoppel, the string of contracts should not affect the case. This case does
not turn on a misrepresentation. It is a question of common mistake or common intention and,
once the common intention is established, that is sufficient for rectification. Unless the
judge's finding that there was a common intention to make an oral agreement to deal in
horsebeans of the feverole type can be upset, the right to rectification follows. It must be
remembered that these transactions arose from an attempt to meet an inquiry by a buyer, i.e.,
to find a commodity which a potential buyer in Egypt had defined. If there is evidence on
which Pilcher J. could find as he did, the plaintiffs are entitled to rectification.
Roche, in reply. When Simonds J. in Crane v. Hegeman-Harris Co. Inc.19 referred to
intention and said that it was sufficient to find a common continuing intention, he meant
intention expressed in oral agreement, i.e., the objective intention. If he meant more than that
"agreement means intention as expressed," the court ought not, in view of the clear
expressions of opinion to the contrary in the other decisions cited, to follow him.
[DENNING L.J. The question could not be: did you intend to sell it as feveroles? but only,
did you agree to sell it as feveroles?]
Yes. Whether the mistake was as to nature or quality, a rectification which has the effect of
making a new contract is not possible. As to the exercise of the court's discretion in allowing
that remedy, see Caird v. Moss.20
Cur. adv. vult.
SINGLETON L.J. stated the facts and continued:- Apart from any question of law, one sees
at once the difficulty caused by the uncertainty as to the meaning of "feveroles." The first
cable of October 26, 1950, mentioned "horsebeans described in Egypt as feveroles," and that
cable led to discussions between Hampson and Brooks. I cannot say that it is clear from the
evidence that the word "feveroles" has the same meaning everywhere, though it seems fairly
clear that they are a type of horsebean.
[His Lordship then referred to the conclusions of Pilcher J. and continued:] Innocent
misrepresentation may give rise to a right of rejection; that right was not exercised in this
case. And it might have been possible to establish a breach of a collateral warranty. Neither
of these questions arises. The sole question is as to whether the plaintiffs are entitled to
rectification of the contracts. This depends not on intention but on proof that the written
contract is not the contract into which the parties entered, and the terms of the contract into
which they had entered must be clearly proved.
In Crane v. Hegeman - Harris Co. Inc.1 Simonds J. said2: "I would rather, I think, say that
the court can only act if it is satisfied beyond all reasonable doubt that the instrument does
not represent their common intention, and is further satisfied as to what their common
intention was. For let it be clear that it is not sufficient to show that the written instrument
does not represent their common intention unless positively also one call show what their
common intention was. It is in the light of those principles that I must examine the facts of
this somewhat complicated case." When that case was before the Court of Appeal Sir Wilfred
Greene M.R. spoke of the "high degree of conviction which unquestionably is to be insisted
upon in rectification cases."3
I accept without hesitation the finding of Pilcher J. that both Hampson and Brooks were
under a mistaken view as to what "feveroles" or beans described in Egypt as "feveroles"
were, and that that mistake came about as the result of what Brooks said. Still, it is necessary
to ascertain what the contract was. The offer clearly was Tunisian horsebeans. It was so
treated by the plaintiffs in their cable to Rose (Middle East), who accepted it the same day.
On acceptance by the plaintiffs a slip was made out in the defendants' office, and that formed
the groundwork of the contract. The oral contract between the plaintiffs and the defendants
was in fact for 500 tons of Tunisian horsebeans, and the written contract was in the same
terms. In those circumstances, a claim to rectify the written contract by adding the word
"feveroles" cannot succeed. The written contract is in the same terms as the oral contract.
Whatever remedies the plaintiffs might have, or might have had, rectification is not one of
them.
Mr. Roche, on behalf of the defendant sellers, submitted that either there was a contract for
horsebeans, or there was no contract at all. That seems to me to be right. I cannot accept the
submission of Mr. Diplock that, because of the conversation some days before November 2 to
the effect that "feveroles" meant "horsebeans," the oral contract was a contract for the sale of
"feveroles." We know that the defendants passed on to the plaintiffs an offer for the sale of
horsebeans. If it had been sought to introduce the word "feveroles" into the contract, it is
almost certain that inquiries would have been made in North Africa, and some information
might have been forthcoming as to the varieties of horsebeans, in which event Hampson and
Brooks might not have agreed on terms, or they might have agreed on terms other than those
at which they arrived.
The same considerations apply to the second contract as to the first. I do not regard this as a
case in which rectification can be granted. I am in favour of allowing the appeal.
DENNING L.J. stated the facts and continued:- It is quite plain that neither the Egyptian
buyer nor the plaintiffs could claim damages under the written contracts, because those
contracts were contracts for horsebeans, and the goods delivered were in fact horsebeans; and
that has been so found by arbitrators in London. In those circumstances the plaintiffs seek in
this action to have their contract with the defendants rectified so as to make it refer to
"feveroles" instead of horsebeans. If they get the contract rectified they will claim damages
for failure to deliver "feveroles." Their object in so doing is, of course, to cover themselves
against a claim by their Egyptian buyers. We were told that the courts in Egypt have, on a
similar parcel of 200 tons, already held the plaintiffs liable for not supplying "feveroles."
Hence the desire of the plaintiffs to be able to claim over against the defendants.
The facts which I have stated raise nice questions on the law of mistake. It is quite clear on
the evidence that the parties to the second and third contracts (though not to the first) were
under a common mistake. The defendants, the plaintiffs, and the Port Said firm of buyers all
thought that "feveroles" meant horsebeans, and that horsebeans meant "feveroles." They
thought that if they got horsebeans they would get the "feveroles" which they wanted. It was
under the influence of that mistake that they entered into those contracts for horsebeans. The
defendants were, of course, the cause of all the trouble. Thinking that "feveroles" just meant
horsebeans, they asked their Algerian supplier to supply horsebeans, and he did so. They
ought to have asked him to supply "feveroles," and then there would have been no trouble.
The Algerian supplier no doubt knew the difference between horsebeans ("feves") and
"feveroles." If he had been asked for "feveroles," he would have quoted for "feveroles" and
supplied "feveroles"; but being asked only for horsebeans, he supplied horsebeans.
What is the effect in law of this common mistake on the contract between the plaintiffs and
defendants? Mr. Roche quoted Bell v. Lever Brothers Ld.,4 and suggested that the contract
was a nullity and void from the beginning, though he shuddered at the thought of the
consequences of so holding. I am clearly of opinion that the contract was not a nullity. It is
true that both parties were under a mistake, and that the mistake was of a fundamental
character with regard to the subject-matter.
The goods contracted for - horsebeans - were essentially different from what they were
believed to be - "feveroles." Nevertheless, the parties to all outward appearances were agreed.
They had agreed with quite sufficient certainty on a contract for the sale of goods by
description, namely, horsebeans. Once they had done that, nothing in their minds could make
the contract a nullity from the beginning, though it might, to be sure, be a ground in some
circumstances for setting the contract aside in equity. In Ryder v. Woodley,5 where a buyer
contracted to buy a commodity described "St. Gilles Harris wheat," believing that it was
wheat when it was not, the contract was held to be binding on him and not a nullity.
In Harrison & Jones Ld. v. Bunten & Lancaster Ld.,6 where parties contracted for the supply
of "Calcutta kapok 'Sree' brand," both believing it to be pure kapok containing no cotton,
whereas it in fact contained 10 to 12 per cent. of cotton, Pilcher J. held that their mistake,
although fundamental, did not make the contract a nullity. In McRae v. Commonwealth
Disposals Commission,7 where sellers contracted to sell a stranded oil tanker, described as
lying at a specified point off Samarai, believing that there was a tanker at such a place when
there was in fact no such tanker there, nor anywhere in the locality, the High Court of
Australia held that the mistake, although fundamental, did not make the contract a nullity,
and that the buyers were entitled to damages. The court showed convincingly that Couturier
v. Hastie8 was a case of construction only. It was not a case where the contract was void for
mistake. The other old cases at common law can likewise be explained. At the present day,
since the fusion of law and equity, the position appears to be that when the parties to a
contract are to all outward appearances in full and certain agreement, neither of them can set
up his own mistake, or the mistake of both of them, so as to make the contract a nullity from
the beginning. Even a common mistake as to the subject-matter does not make it a nullity.
Once the contract is outwardly complete, the contract is good unless and until it is set aside
for failure of some condition on which the existence of the contract depends, or for fraud, or
on some equitable ground: see Solle v. Butcher.9 Could this contract then, have been set
aside? I think it could, if the parties had acted in time. This contract was made under a
common mistake as to the meaning of "feveroles" and "horsebeans." This mistake was
induced by the innocent misrepresentation of the defendants made to the buyers and passed
on to the sub-buyers. As soon as the buyers and sub-buyers discovered the mistake, they
could, I think, have rejected the goods and asked for their money back. The fact that the
contract was executed would not be a bar to rescission. But once the buyers and sub-buyers
accepted the goods, and treated themselves as the owners of them, they could no longer claim
rescission: see Leaf v.  International Galleries.10
The buyers now, after accepting the goods, seek to rectify the contract. Instead of it being a
contract for "horsebeans" simpliciter, they seek to make it a contract for "horsebeans
described in Egypt as feveroles" or, in short, a contract for "feveroles." The judge has granted
their request. He has found that there was "a mutual and fundamental mistake" and that the
defendants and the plaintiffs, through their respective market clerks, "intended to deal in
horsebeans of the feverole type"; and he has held that, because that was their intention - their
"continuing common intention" - the court could rectify their contract to give effect to it. In
this I think he was wrong. Rectification is concerned with contracts and documents, not with
intentions. In order to gct rectification it is necessary to show that the parties were in
complete agreement on the terms of their contract, but by an error wrote them down wrongly;
and in this regard, in order to ascertain the terms of their contract, you do not look into the
inner minds of the parties - into their intentions - any more than you do in the formation of
any other contract. You look at their outward acts, that is, at what they said or wrote to one
another in coming to their agreement, and then compare it with the document which they
have signed. If you can predicate with certainty what their contract was, and that it is, by a
common mistake, wrongly expressed in the document, then you rectify the document; but
nothing less will suffice. It is not necessary that all the formalities of the contract should have
been executed so as to make it enforceable at law (see Shipley Urban District Council
v. Bradford Corporation11; but, formalities apart, there must have been a concluded contract.
There is a passage in Crane v. Hegeman-Harris Co. Inc.12 which suggests that a continuing
common intention alone will suffice; but I am clearly of opinion that a continuing common
intention is not sufficient unless it has found expression in outward agreement. There could
be no certainty at all in business transactions if a party who had entered into a firm contract
could afterwards turn round and claim to have it rectified on the ground that the parties
intended something different. He is allowed to prove, if he can, that they agreed something
different: see Lovell & Christmas v. Wall, per Lord Cozens-Hardy M.R., and per Buckley
L.J.,13 but not that they intended something different.
The present case is a good illustration of the distinction. The parties no doubt intended that
the goods should satisfy the inquiry of the Egyptian buyers, namely, "horsebeans described in
Egypt as feveroles." They assumed that they would do so, but they made no contract to that
effect. Their agreement, as outwardly expressed, both orally and in writing, was for
"horsebeans." That is all that the defendants ever committed themselves to supply, and all
they should be bound to. There was, no doubt, an erroneous assumption underlying the
contract - an assumption for which it might have been set aside on the ground of
misrepresentation or mistake - but that is very different from an erroneous expression of the
contract, such as to give rise to rectification.
The matter can best be tested by asking what would have been the position if the contract
between the defendants and the plaintiffs had been for "feveroles." Surely, then, the
defendants on their side would have stipulated with their Algerian suppliers for the delivery
of "feveroles," and the plaintiffs on their side would have agreed with their sub-buyers to
deliver "feveroles." It would not be fair to rectify one of the contracts without rectifying all
three, which is obviously impossible.
There is one other matter I must mention. In the statement of claim the plaintiffs originally
claimed damages for breach of a collateral warranty - a warranty that the horsebeans would
be a compliance with a demand for "feveroles" - but that claim was formally abandoned at
the trial. I do not myself quite see why it was abandoned. Section 4 of the Sale of Goods Act,
1893, was no bar to it. Nor was such a warranty in any way in contradiction of the written
contract. (Smith v. Jeffryes14 was not an action on a collateral warranty.) The only difficulty
in such a claim might be whether there was a contractual warranty or merely an innocent
misrepresentation. I should myself have thought that it had a better chance of success than the
claim for rectification. It was put forward by the plaintiffs very forcibly in their letter of
March 12, 1951, but its abandonment at the trial makes it impossible for us to consider it. We
have only to consider the question of rectification; and on that I think that the plaintiffs fail. I
agree that the appeal should be allowed and judgment entered for the defendants.
MORRIS L.J. Both plaintiffs and defendants are merchants engaged in the grain trade and
dealing on the Baltic Exchange, and there can be no doubt that the plaintiffs, as buyers,
would appreciate that the defendants did business for forward shipment. The plaintiffs would
appreciate that the defendants bought and sold simultaneously and would buy from a shipper
in order to sell to the plaintiffs. The defendants knew that the plaintiffs were buying in order
to resell. These circumstances do not, however, govern the determination of the issue of
rectification now raised between the parties.
It seems to me clear beyond doubt that both parties proceeded on the basis that "feveroles"
and "horsebeans" were the same. The plaintiffs' representative expressed the matter
succinctly when he said: "I had agreed to buy because feveroles were horsebeans and
horsebeans were feveroles." In that belief the parties came to agreement, and the formal
written contracts were prepared and signed. The parties had throughout a clear common
intention and purpose of buying and selling horsebeans, and their written agreements
faithfully embodied and exactly recorded what they had agreed. In these circumstances it
seems to me that no claim for rectification can succeed.
Both parties thought that the result of what they clearly understood and clearly expressed
would be that the plaintiffs as buyers would be able to satisfy the inquiry which, as the
defendants knew, had been received. In that they were mistaken as a result of the advice
honestly given by the defendants' market clerk. But the fact that they were under a mistaken
impression as to what their agreement would achieve does not disturb the clarity and the
fixity of the agreement which they in fact made. The defendants intended to offer horsebeans
and the plaintiffs intended to accept horsebeans: the written agreements correctly reflected
and incorporated what they had agreed.
The judge said that "both the plaintiffs and the defendants made an oral agreement in which
they intended to deal in horsebeans of the feverole type." With respect, that was not quite the
position. There was no question of contracting in reference to a "type" of horsebeans. There
was a joint understanding that they should contract in reference to "horsebeans" simpliciter
which they thought were the same as "feveroles." If, as now appears to be the case, they were
wrong, it appears probable that they would not have acted as they did had they been
enlightened. But this does not enable one party to convert the contract into something
different from what it was.
On the assumption that "feveroles" are different from "horsebeans," it cannot be said that the
parties agreed on the sale of a commodity of the separate existence of which they had no
knowledge. The defendants were selling "horsebeans," and in order to sell they would have to
acquire "horsebeans." If "feveroles" are different, then the defendants, and equally the
plaintiffs, never even gave their minds at all to the question of a sale of some products which
are different from "horsebeans."
Appeal allowed.
Graham Leslie v Farrar Construction Limited (2016)
The claimant, seeking to build up a residential property portfolio, made a framework
agreement with the defendant construction company to identify and develop various sites.
Five developments were identified and completed. There was debate as to whether seven
other sites were included. In early 2013, the parties fell out and, in July 2013, the claimant
sought to finally part company with the defendant. The defendant commenced proceedings
for monies that it claimed were owed. At arbitration, the arbitrator found for the defendant.
The claimant alleged that the arbitrator lacked jurisdiction, and commenced proceedings in
the Technology and Construction Court.
A number of issues arose. They included: (i) whether the claimant was entitled to recover
build costs regarding each development and what those costs entailed; (ii) whether the
agreement would apply to a particular development if that conclusion could be drawn by
reference to what had been said and done in relation to it or whether an express agreement
that it should apply was required; (iii) whether the disputed sites fell within the agreement;
and (iv) whether the claimant was entitled to complain about overpayment or to recover any
overpayment in relation to the completed developments.
The court ruled:
On the evidence, among other things, the defendant was entitled to recover build costs
relating to each development, namely: the direct cost of labour and materials; and site
specific indirect costs incurred in relation to that development but not the capital acquisition
of plant and machinery employed in relation to that development, nor non-site specific
general business costs including head office overheads. The terms of the framework
agreement would apply to a development if that conclusion could be drawn by reference to
what had been said and done in relation to that development. All of the disputed sites fell
within the agreement. The claimant was not entitled to complain about overpayment, or to
recover any overpayment, in relation to the completed developments. Further rulings were
made relating to the individual developments (see [12] of the judgment).
Overall, taking into account overpayment on the uncompleted properties, the claimant would
be liable to pay the sum of £139,428.16 to the defendant (see [280] of the judgment).

Grist v Bailey (1966)

The plaintiff contracted to purchase from the defendant a freehold property "subject to the
existing tenancy thereof" at a price of £850. The defendant refused to complete the contract
on the ground that she had believed at the time it was entered into that the property was
subject to a statutory tenancy in favour of A whereas in fact the property was not so subject.
The value of the property with vacant possession, she claimed, was about £2,250. The
plaintiff's agent for the negotiation of the contract had believed at the time of the contract that
there was a protected tenancy of the property in favour of B. In fact, at the date of the
contract, there was no protected tenancy at all in existence.
On the question whether the contract was void at law, alternatively, whether it ought to be set
aside in equity, on the ground of mistake as to a fundamental element therein common to
both the plaintiff's agent and the defendant:-
Held, (1) that, on the evidence, there was a common mistake as to the nature of the tenancy
affecting the property in that both plaintiff and defendant believed there was a protected
tenancy subsisting at the date of the contract, though they may have differed in their belief as
to who the protected tenant was.
(2) That while at law the mistake was not such as would avoid the contract, in equity the
mistake was fundamental in that there was not in fact an "existing tenancy" within the
meaning of the contract and that neither party, knowing the true state of affairs would have
negotiated for so small a price for the property as £850 (post, p. 542B-C).
(3) That the defendant or her agents had not been at fault so as to be disentitled to relief in
equity (post, p. 542E-F).
Bell v. Lever Bros. Ltd. [1932] A.C. 161, H.L. considered.
Dicta of Denning L.J. in Solle v. Butcher [1950] 1 K.B. 671, 693; 66 T.L.R. (Pt. 1) 448;
[1949] 2 All E.R. 1107 applied.

Hardman v Booth (1863)

Plaintiff, having had no previous dealings with the firm, and knowing them only by
reputation applied at the place of business of ‘Gondell & Co’ for orders for goods; the firm
then consisting of T Gondell only and being managed by E Gondell, a clerk. On plaintiff
asking to see Messrs Gondell, E Gondell presented himself and so conducted himself as to
lead plaintiff to suppose he was one of the firm of Gondell & Co and had authority to order
goods on their behalf which was not the fact. Plaintiff sent goods, according to E Gondell’s
order, to the place of business of Gondell & Co, an invoice being made out by E Gondell’s
direction to the name of ‘E Gondell & Co.’ E Gondell, unknown to plaintiff, carried on
business with one Todd at another place; and the goods were, within three or four days of
their delivery, pledged with defendant, with a power of sale to secure advances bonâ fide
made by him to Gondell and Todd and he sold them under the power without notice from
plaintiff: Held (1) there was no contract of sale, inasmuch as plaintiff intended to contract
with Gondell & Co and not with E Gondell personally and Gondell & Co were not
contracting parties; (2) no property passed and plaintiff was entitled to recover value of goods
from defendant.
Harrison & Jones v Bunten & Lancaster (1953)
By two contracts in writing, the sellers agreed to sell, and the buyers agreed to buy, a quantity
of Calcutta Kapok ‘Sree’ brand. After the goods had been delivered, the buyers found that,
instead of being pure kapok, they contained an admixture of cotton, which was unsuitable for
their machinery. It appeared that both parties thought that Calcutta Kapok ‘Sree’ brand was
tree kapok, whereas in the kapok trade it was a brand which was known to contain an
admixture of bush cotton. On the question whether the contracts were nullities on the ground
of mutual mistake of fact: Held when goods, whether specific or unascertained, are sold
under a known trade description, without misrepresentation or breach of warranty, the fact
that both parties are unaware that goods of that known trade description lack any particular
quality is irrelevant; if goods answering to the particular description are supplied, the parties
are bound by their contract and there is no room for the doctrine that the contract can be
treated as a nullity on the ground of mutual mistake, even though the mistake, from the
purchaser’s point of view, may turn out to be of a fundamental character; and, therefore, the
contracts were not nullities and the buyers were bound by them.
Hartog v Colin and Shields (1939)
The defendants contracted to sell to the plaintiff 30,000 Argentine hare skins, but by an
alleged mistake they offered the goods at certain prices per pound instead of at those prices
per piece, the value of a piece being approximately one-third that of a pound. In verbal and
written negotiations which took place prior to the sale, reference had always been made to the
price per piece and never to the price per pound, and expert evidence was given that
Argentine hare skins were generally sold at prices per piece:—
Held – the plaintiff could not reasonably have supposed that the offer expressed the real
intention of the persons making it, and must have known it to have been made by mistake.
The plaintiff did not, by his acceptance of the offer, make a binding contract with the
defendants.

Howatson v Webb (1908)

The court accepted a plea of non est factum, approving the distinction made by the trial judge
between the approval of the contents and the character of the deed executed. Cozens-Hardy
MR said that he approved every word of Warrington J’s judgment.
Ingram v Little (1961)
Three plaintiffs, joint owners of a car, advertised it for sale. A rogue, introducing himself as
H., offered to buy it. When he pulled out his cheque book to pay for it, the first plaintiff,
conducting the negotiations for the plaintiffs, told him that they expected cash, that they were
not prepared to accept payment by cheque, and that the proposed sale was cancelled. The
rogue thereupon said that he was P.G.M.H., a reputable businessman, living at an address in
Caterham, and having business interests in Guildford. The plaintiffs had never heard of
P.G.M.H., but the second plaintiff forthwith went to the local post office, and ascertained
from the telephone directory that there was such a person as P.G.M.H., living at the address
given by the rogue. The second plaintiff told the first plaintiff what she had learnt and, as the
result of that information, they believed that the rogue was P.G.M.H. and decided to let the
rogue have the car in exchange for his cheque.
The rogue had nothing whatever to do with the real P.G.M.H., and the rogue's cheque was
dishonoured on presentation. Meanwhile, the rogue had sold the car to the defendant, who
bought it in good faith.
On a claim by the plaintiffs against the defendant for the return of the car, or, alternatively,
damages for its conversion:-
Held (Devlin L.J. dissenting), that where a person physically present and negotiating to buy a
chattel fraudulently assumed the identity of an existing third person, the test to determine to
whom the offer was addressed was how ought the promisee to have interpreted the promise;
applying that test to the present case and treating the plaintiffs as the offerors, the offer was
made solely to the real P.G.M.H., the rogue was incapable of accepting it, and the plaintiffs'
mistake, therefore, prevented the formation of a contract with the rogue; accordingly, the
plaintiffs' claim succeeded (post, pp. 53, 55, 61).
Dictum of Viscount Haldane in Lake v.  Simmons [1927] A.C. 487, 500; 43 T.L.R. 417, H.L.
applied.
Phillips v. Brooks Ltd. [1919] 2 K.B. 243; 35 T.L.R. 470 distinguished.
Hardman v. Booth (1863) 1 H. & C. 803 and Cundy v. Lindsay (1878) 3 App.Cas. 459, H.L.
considered.
Per Devlin L.J. There was nothing to rebut the ordinary presumption that the first plaintiff
was addressing her acceptance to the person to whom she was speaking. Therefore, there was
offer and acceptance in form. In the present case, the rogue's identity was immaterial. His
credit-worthiness was material, for the plaintiffs were really concerned with his credit-
worthiness, not with his identity, but credit-worthiness in relation to a contract was not a
basic fact, and a mistake about it did not vitiate a contract (post, pp. 67, 69).
Decision of Slade J. affirmed.

King’s Norton Metal Co Ltd v Edridge, Merret and Co Ltd (1897)

A rogue ordered goods from the claimant using a printed letter head a claiming to be a
company called Hallum & co with offices in Belfast Lile and Ghent. In fact no such company
existed. The claimant sent out the goods on credit. The rogue sold the goods on to the
defendants who purchased them in good faith. The rogue then disappeared without paying for
the goods. The claimants brought an action for conversion of the goods based on their
unilateral mistake as to identity.

Held: the contract was not void for mistake as they could not identify an existing company
called Hallum & co with whom they intended to contract. The mistake was only as to the
attributes of the company. The contract was voidable for misrepresentation but that would not
stop title passing to the rogue and the defendants therefore acquired good title to the goods.
Lake v Simmons (1927)
The plaintiff, a jeweller, was insured under a Lloyd's policy against loss or damage to jewels
by (inter alia) theft. The policy contained a clause exempting the insurers from liability in the
case of "loss by theft or dishonesty committed by .... any customer or broker or broker's
customer in respect of goods entrusted to them by the assured." A woman E. E., who had
previously bought some articles at the plaintiff's shop, induced the plaintiff to let her have
possession of two pearl necklets by fraudulently representing that she was the wife of a
certain person and that she wanted them for the purpose of showing them to her husband and
to a purely fictitious person for their approval with a view to purchase by them. E. E.
disposed of the necklets for her own benefit. In an action on the policy to recover the value of
the necklets the insurers pleaded the exemption clause. The trial judge found that E. E.'s
conduct was fraudulent throughout, and held that she was guilty of larceny by a trick, and the
Court of Appeal and the House of Lords accepted these conclusions:-
Held, first, that the plaintiff hall not entrusted the necklets to E. E., because there was no real
consent by him to her obtaining possession of them, and, secondly, that quoad the particular
goods, E. E. was not a customer within the meaning of the clause.
Decision of the Court of Appeal [1926] 2 K. B. 51 reversed and decision of McCardie
J. [1926] 1 K. B. 366 restored.

Lewis v Averay (1972)

The plaintiff brought an action against the defendant in the county court for the recovery of a
motor car and obtained judgment. Both parties were legally aided. Judgment was given for
the plaintiff. The defendant wished to appeal but he was refused legal aid on the ground that
there was no reasonable ground of appeal. However he obtained assistance from the
Automobile Association, of which he was a member. The association undertook the appeal.
They instructed solicitors and paid them. The plaintiff was granted legal aid to resist the
appeal. The defendant succeeded in his appeala and applied for an order under s 1b of the
Legal Aid Act 1964 for payment out of the legal aid fund of his costs on the appeal. The Law
Society resisted the application on the grounds that the costs of the appeal had not been
'incurred by' the defendant but by the association and in any event it would not be 'just and
equitable' to make an order since the costs had not been borne by the defendant.
b
     Section 1, so far as material, provides:
'(1) Where a party receives legal aid in connection with any proceedings between him and a
party not receiving legal aid (in this Act referred to as “the unassisted party”) and those
proceedings are finally decided in favour of the unassisted party, the court by which the
proceedings are so decided may, subject to the provisions of this section, make an order for
the payment to the unassisted party out of the legal aid fund of the whole or any part of the
costs incurred by him in those proceedings.
'(2) An order may be made under this section in respect of any costs if (and only if) the court
is satisfied that it is just and equitable in all the circumstances that provision for those costs
should be made out of public funds; and before making such an order the court shall in every
case (whether or not application is made in that behalf) consider what orders should be made
for costs against the party receiving legal aid and for determining his liability in respect of
such costs … '
[1973] 2 All ER 229 at 230
Held – The defendant was entitled to the order sought because—
(i) the costs of the appeal had been 'incurred by' him since he was the person legally
responsible for the costs; the association had merely agreed to indemnify him (see p
231 f and h and p 232 d and g, post);
(ii) it was just and equitable that an order should be made; even though the defendant's costs
had been borne by the association, he was a member of the association and might well wish
to pay back into their funds the costs which they had provided for him (see p 231 j and p
232 a d and g, post).
Per Curiam. The question whether an unassisted party was unreasonably refused legal aid is
not one that should be taken into account when considering whether it is just and equitable to
make an order in his favour under s 1 of the 1964 Act (see p 232 b and e to g, post); dicta of
Sir Jocelyn Simon P and Ormrod J in Povey v Povey [1970] 3 All ER at 617, 624, 625
doubted.

Magee v Pennine Insurance Co Ltd (1969)

In 1961 the plaintiff, who was then aged 58 and could not drive, bought a car on hire-
purchase terms through a garage. He wanted the car for his son of 18 to drive. The plaintiff
signed an insurance proposal form, the details of which were written in by the proprietor of
the garage. The proposal wrongly stated that the plaintiff was the holder of a provisional
licence and that he himself and his elder son of 35, who had an annual licence, would drive
the car in addition to his younger son. The declaration signed by the plaintiff said that the
answers in the proposal were true and it was to be the basis of the contract of insurance with
the defendant insurance company. The policy was issued and renewed each year, the car
being replaced by another covered under the policy in 1964.
On April 25, 1965, the car was involved in an accident when being driven by the younger
son. The car skidded into a shop window and was a complete wreck. The plaintiff claimed
£600 under the policy as the value of the car. On May 12, 1965, insurance brokers wrote to
the plaintiff telling him that the insurers were prepared to offer him £385 in settlement of his
claim. The plaintiff accepted the offer.
On the plaintiff's claim for £385 payable either under the policy or the compromise
agreement contained in the letter of May 12, the defendants claimed, inter alia, that they were
entitled to repudiate their liability under the contract and the subsequent agreement. The
county court judge found that the plaintiff had not been fraudulent, that the defendants were
entitled to repudiate the policy because of the inaccuracy of the plaintiff's answers, but that
there was a concluded agreement to settle the claim for that sum. Judgment was given for the
plaintiff for £385.
On the defendants' appeal:-
Held, allowing the appeal (Winn L.J. dissenting) that in entering into the compromise
agreement for £385 both parties were under the common fundamental mistake that the
plaintiff had a valid claim under the insurance policy and that in the circumstances the
defendants were entitled to have the agreement set aside.
Bell v. Lever Brothers, Ltd. [1932] A.C. 161, H.L.(E.) considered.
Per Lord Denning M.R. A common mistake does not make a contract void at law: but it
makes it voidable in equity. A contract is liable in equity to be set aside if the parties were
under a common misapprehension either as to the facts or as to their relative and respective
rights, provided that the misapprehension was fundamental and the party seeking to set it
aside was not himself at fault: Solle v. Butcher [1950] 1 K.B. 671, 693; [1949] 2 All E.R.
1107, C.A. applied (post, p. 514E-G).
Per Winn L.J. There was a misapprehension as to rights, but no misapprehension whatsoever
as to the subject-matter of the contract, namely, the settlement of the rights of the assured
with regard to the accident that happened (post. p. 516C). There is no rule of law in a case
such as this that a warranty given at the inception of a contract of insurance by the terms of
the proposal form and its acceptance by the insured is to be embodied or tacitly read into any
contract which is made between such a proposer and the insurer in settlement of a claim
under the contract (post, pp. 516H-517A).
Per Fenton Atkinson L.J. The insurers should be entitled to avoid the compromise agreement
on the ground of mutual mistake in a fundamental and vital matter (post, p. 518A).

Mc Rae v Commonwealth Disposals Commission (1951)

Facts
The complainant, McRae, won a tender from the defendants, Commonwealth Disposals
Commission, to retrieve an oil tanker that was on Jourmaund Reef near Samarai. However,
when the complainant went to the location, after laying out significant expenses for the
salvage, they discovered that in fact there was no oil tanker. The Commonwealth Disposals
Commission had only heard that there was an oil tanker there from gossip. They later learned
that it was not.
Issues
At first instance, it was held that there was no contract between the complainant and the
defendant. However, this decision was appealed by McRae. The complainant sought damages
from the defendant for breach of contract, fraudulent misrepresentation of the oil tanker and
for damages since they did not disclose the information about the oil tanker when it came to
their knowledge that it did not exist. The defendants argued that they had no liability to pay
damages for breach of contract, as it was void by common mistake that the oil tanker did not
exist. The issue in this case was whether the complainant could recover damages and if the
contract could be void by a common mistake.
Held
It was held that the complainant was entitled for damages from the defendant. The contract
was not null and void because of a common mistake. A contract did exist between the
complainant and the defendant and since this oil tanker did not exist, this was a breach of
contract. Thus, the complainant was entitled to damages for breach of contract and for the
purchase price amount of the oil tanker, as well as the expenses paid out for the salvage
operation.

Phillips v Brooks (1919)

If A., fraudulently assuming the name of a person of credit and stability, buys, in person, and
obtains delivery of, goods from B., the property in the goods passes to A., and he can
therefore give a good title thereto to a third party who, acting bona fide and without notice,
has given value therefor, unless in the meantime B. has taken steps to disaffirm the contract
with A.

Edmunds v. Merchants' Despatch Transportation Co. (1883) 135 Mass. 283 followed.

ACTION tried by Horridge J.

The plaintiff, who was a jeweller, sued the defendants, who were pawnbrokers, for the return
of a ring or, alternatively, its value, and damages for its detention.

On April 15, 1918, a man entered the plaintiff's shop and asked to see some pearls and some
rings. He selected pearls at the price of 2550l. and a ring at the price of 450l. He produced a
cheque book and wrote out a cheque for 3000l. In signing it, he said: "You see who I am, I
am Sir George Bullough," and he gave an address in St. James's Square. The plaintiff knew
that there was such a person as Sir George Bullough, and finding on reference to a directory
that Sir George lived at the address mentioned, he said, "Would you like to take the articles
with you?" to which the man replied: "You had better have the cheque cleared first, but I
should like to take the ring as it is my wife's birthday to-morrow," whereupon the plaintiff let
him have the ring. The cheque was dishonoured, the person who gave it being in fact a
fraudulent person named North who was subsequently convicted of obtaining the ring by
false pretences. In the meantime, namely on April 16, 1918, North, in the name of Firth, had
pledged the ring with the defendants who, bona fide and without notice, advanced 350l. upon
it.

In his evidence the plaintiff said that when he handed over the ring he thought he was
contracting with Sir George Bullough, and that if he had known who the man really was he
would not have let him have it. In re-examination he said that he had no intention of making a
contract with any other person than Sir George Bullough.
Raffles v Wichelhaus (1864)
The parties entered a contract for the sale of some cotton to be shipped by 'The Peerless' from
Bombay. The Peerless had a sailing from Bombay in October and in December. The
defendant thought that it was the October sailing and the claimant believed it was the
December sailing which had been agreed.

The court applied an objective test and stated that a reasonable person would not have been
able to state with certainty which sailing had been agreed. Therefore the contract was void as
there was no consensus ad idem.
Saunders v Anglia Building Society (1970)
G., a widow aged 78, who had a leasehold interest in a house, gave the deeds to her trusted
nephew, intending to make a gift to him to take effect immediately. She knew that her
nephew wished to raise money on the house and that L., her nephew's business associate, was
to collaborate with the nephew in raising money on the house. In June, 1962, L. asked her to
sign a document. She had broken her spectacles and could not read it. She asked what it was
and L. told her that it was a deed of gift of the house to her nephew. She executed it in that
belief, and the nephew witnessed the execution, it being part of his arrangements with L. that
L. should raise money on the house and repay it to the nephew by installments. The document
signed was in fact an assignment of the house by her to L. for £3,000. The £3,000 was never
paid nor intended to be paid to her. L., having obtained the deeds and a reference as to his
reliability from the nephew, mortgaged the house for £2,000 to a building society, but used
the money so raised to pay his debts and defaulted on the mortgage installments. The building
society sought to obtain possession of the house.
G., at the nephew's instigation, began an action, in which she pleaded non est factum, against
L. and the building society and asked for a declaration that the assignment was void and that
the title deeds should be delivered to her. The judge found that G. did not read the document,
that L. represented it to her as a deed of gift to the nephew; that she executed it in that belief;
and that a sale or gift to L. was something which she did not and would not ever have
contemplated; and he held that the plea of non est factum was established and granted the
declaration asked for.
The Court of Appeal reversed the decision. On appeal to the House of Lords:-
Held, that the plea of non est factum which would make the assignment void against the
innocent building society had not been established. G., having signed what was obviously a
legal document on which money was advanced on the faith of it being her document, could
not now disavow her signature.
Per Lord Reid. The plea of non est factum could not be available to anyone who signed
without taking the trouble to find out at least the general effect of the document. Nor could it
be available to a person whose mistake was really a mistake as to the legal effect of the
document. There must be a radical or fundamental difference between what he signed and
what he thought he was signing (post, pp. 1016F, 1017B-E).
Per Lord Hodson. The difference to support a plea of non est factum must be in a particular
which goes to the substance of the whole consideration or to the root of the matter (post,
pp. 1018H - 1019A).
Per Viscount Dilhorne. It will not suffice if the signer thought that in some respect the
document would have a different legal effect from what it has; nor will it suffice if in some
respects it departs from what he thought it would contain. The difference must be such that
the document signed is entirely or fundamentally different from that which it was thought to
be, so that it was never the signer's intention to execute the document (post, p. 1022G-H).
Per Lord Wilberforce. A document should be held to be void (as opposed to voidable) only
when the element of consent to it is totally lacking, i.e., when the transaction which the
document purports to effect is essentially different in substance or in kind from the
transaction intended (post, p. 1026A-B).
Per Lord Pearson. The essential features of the doctrine are expressed by Byles J. in Foster
v. Mackinnon 

Shogun Finance Ltd v Hudson (2003)

A dealer agreed a price for the sale of a motor vehicle on hire-purchase to a fraudster who
produced a stolen driving licence as proof of his identity. The dealer faxed to the claimant
hire-purchase company a copy of the licence and a draft hire-purchase agreement that the
fraudster had signed, forging the signature on the licence. Having completed a satisfactory
credit check of the person named on the licence the claimant approved the sale. The fraudster
paid the agreed 10% deposit to the dealer partly in cash and partly by way of a cheque, which
was subsequently dishonoured, and was allowed to take the vehicle. The defendant purchased
it in good faith from the fraudster the following day. On the claimant's action against the
defendant for, inter alia, damages for conversion the defendant counterclaimed that he had
acquired good title to the vehicle within the meaning of section 27 of the Hire-Purchase Act
19641. The judge gave judgment for the claimant, and the Court of Appeal by a majority
dismissed the defendant's appeal.
On appeal by the defendant—
Held, dismissing the appeal (Lord Nicholls of Birkenhead and Lord Millett dissenting), that
under section 21(1) of the Sale of Goods Act 1979 the title to the vehicle had at all material
times been in the claimant and accordingly the defendant could not have acquired title to it
from the fraudster save under the provisions of section 27 of the 1964 Act; that the purported
contract between the fraudster and the claimant was constituted by the hire-purchase
agreement under which the hirer purported to be the person named on the driving licence, and
oral evidence could not be adduced to contradict the terms of the written agreement so as to
demonstrate that, in a face-to-face transaction, the fraudster had been the true hirer; that, in
any event, there had not been the necessary consensus ad idem between the fraudster and the
finance company; and that, accordingly, the fraudster had not been the debtor under the
agreement within the meaning of section 29(4) of the 1964 Act and the defendant had not
acquired title to the vehicle under the provisions of section 27 (post, paras 42-47, 49-
50, 117, 119, 166-170, 178, 180, 183, 191, 193).
Cundy v Lindsay (1878) 3 App Cas 459, HL(E), Phillips v Brooks Ltd [1919] 2 KB
243, Ingram v Little [1961] 1 QB 31, CA, Lewis v Averay [1972] 1 QB 198, CA and Hector v
Lyons (1988) 58 P & CR 156, CA considered.
Decision of the Court of Appeal [2001] EWCA Civ 1000; [2002] QB 834; [2002] 2 WLR
867; [2002] 4 All ER 572 affirmed.

Smith v Hughes (1871)

The plaintiff offered to sell to the defendant oats, and exhibited a sample; the defendant took
the sample, and on the following day wrote to say that he would take the oats at the price of
34s. per quarter. The defendant afterwards refused to accept the oats on the ground that they
were new, and he thought he was buying old oats; nothing, however, was said at the time the
sample was shewn as to their being old; but the price was very high for new oats. The judge
left to the jury the question whether the plaintiff had believed the defendant to believe, or to
be under the impression, that he was contracting for old oats, and, if they were of opinion that
the plaintiff had so believed, he directed them to find for the defendant. The jury having
found for the defendant:-
Held, that there must be a new trial:
Per Cockburn, C.J., on the ground that the passive acquiescence of the seller in the self-
deception of the buyer did not entitle the latter to avoid the contract.
Per Blackburn, J., on the ground that there is no legal obligation in a vendor to inform a
purchaser that the latter is under a mistake not induced by the act of the vendor; and that the
direction did not bring to the minds of the jury the distinction between agreeing to take the
oats under the belief that they were old, and agreeing to take the oats under the belief that the
plaintiff contracted that they were old.
Per Hannen, J., on the ground that the direction did not sufficiently explain to the jury that, in
order to relieve the defendant from liability, it was necessary that they should find, not
merely that the plaintiff believed the defendant to believe that he was buying old oats, but
that the plaintiff believed the defendant to believe that he, the plaintiff, was contracting to sell
old oats.
BLACKBURN, J. In this case I agree that on the sale of a specific article, unless there be a
warranty making it part of the bargain that it possesses some particular quality, the purchaser
must take the article he has bought though it does not possess that quality. And I agree that
even if the vendor was aware that the purchaser thought that the article possessed that quality,
and would not have entered into the contract unless he had so thought, still the purchaser is
bound, unless the vendor was guilty of some fraud or deceit upon him, and that a mere
abstinence from disabusing the purchaser of that impression is not fraud or deceit; for,
whatever may be the case in a court of morals, there is no legal obligation on the vendor to
inform the purchaser that he is under a mistake, not induced by the act of the vendor. And I
also agree that where a specific lot of goods are sold by a sample, which the purchaser
inspects instead of the bulk, the law is exactly the same, if the sample truly represents the
bulk; though, as it is more probable that the purchaser in such a case would ask for some
further warranty, slighter evidence would suffice to prove that, in fact, it was intended there
should be such a warranty. On this part of the case I have nothing to add to what the Lord
Chief Justice has stated.
But I have more difficulty about the second point raised in the case. I apprehend that if one of
the parties intends to make a contract on one set of terms, and the other intends to make a
contract on another set of terms, or, as it is sometimes expressed, if the parties are not ad
idem, there is no contract, unless the circumstances are such as to preclude one of the parties
from denying that he has agreed to the terms of the other. The rule of law is that stated
in Freeman v.  Cooke (1). If, whatever a man's real intention may be, he so conducts himself
that a reasonable man would believe that he was assenting to the terms proposed by the other
party, and that other party upon that belief enters into the contract with him, the man thus
conducting himself would be equally bound as if he had intended to agree to the other party's
terms.
The jury were directed that, if they believed the word "old" was used, they should find for the
defendant - and this was right; for if that was the case, it is obvious that neither did the
defendant intend to enter into a contract on the plaintiff's terms, that is, to buy this parcel of
oats without any stipulation as to their quality; nor could the plaintiff have been led to believe
he was intending to do so.
But the second direction raises the difficulty. I think that, if from that direction the jury would
understand that they were first to consider whether they were satisfied that the defendant
intended to buy this parcel of oats on the terms that it was part of his contract with the
plaintiff that they were old oats, so as to have the warranty of the plaintiff to that effect, they
were properly told that, if that was so, the defendant could not be bound to a contract without
any such warranty unless the plaintiff was misled. But I doubt whether the direction would
bring to the minds of the jury the distinction between agreeing to take the oats under the
belief that they were old, and agreeing to take the oats under the belief that the plaintiff
contracted that they were old.
The difference is the same as that between buying a horse believed to be sound, and buying
one believed to be warranted sound; but I doubt if it was made obvious to the jury, and I
doubt this the more because I do not see much evidence to justify a finding for the defendant
on this latter ground if the word "old" was not used. There may have been more evidence
than is stated in the case; and the demeanour of the witnesses may have strengthened the
impression produced by the evidence there was; but it does not seem a very satisfactory
verdict if it proceeded on this latter ground. I agree, therefore, in the result that there should
be a new trial.

Solle v Butcher (1950)*to print

The Council of the Borough of Milton Keynes v Viridor Limited (2017)

Rectification of a contract, either on the basis of common mistake or, alternatively, on the
basis of unilateral mistake, was appropriate where payment terms offered in a tender had
been unequivocally accepted but the wrong tender document had mistakenly been
incorporated into the contract.
A local authority issued proceedings against a company claiming rectification of a contract
on the grounds of common or unilateral mistake. The contract, dated 1 October 2009,
concerned the carrying out of waste-recycling using the local authority’s existing facility, for
which the company was to make an annual fixed payment.
The wrong document was included in the final formal contract, which differed from the
documents in the accepted tender.  Coulson J. decided that the local authority’s acceptance of
a tender through the formal EU procurement process was a pre-existing agreement by
reference to which the final formal contract could be rectified to include the documents from
the accepted tender.

MUTUAL MISTAKE
Wood v Scarth (1858) 1 F&F 293
The defendant offered in writing to let a pub to the plaintiff at £63 pa. After a conversation
with the defendant’s clerk, the plaintiff accepted by letter, believing that the £63 rental was
the only payment under the contract. In fact, the defendant had intended that a £500 premium
would also be payable and he believed that his clerk had explained this to the plaintiff. The
defendant refused to complete and the plaintiff brought an action for specific performance.
The court refused the order of specific performance but the defendant was liable in damages.