Mistake of Law

Basically, mistake of law occurs when someone acts based on an incorrect understanding or
interpretation of the law. It's an honest mistake that results from a misunderstanding or
misinterpretation of the legal requirements, rather than a deliberate attempt to break the law.
In other words, someone makes a "mistake of law" when they think they're following the law,
but they're actually breaking it because they misunderstood the law.

In signing contracts, mistake of laws occurs when a party is given a false definition of a law by an
official person or document. The case of Cooper v Phibbs (1867) is an example. The
complainant, Mr Cooper, was the nephew of the owner of the salmon fishery near Ballysadare,
Ireland. He leased this salmon fishery from his Uncle. When his uncle died and the lease came
up for the time of renewal, the complainant renewed the lease for the salmon fishery with his
Aunt. However, it was later found out that in the Uncle’s will, Mr Cooper as his nephew, had
been given life tenancy of the salmon fishery. This meant that there was no need for the lease
that existed between him and the Aunt.

Remedy of Rectification
"Rectification" is a legal remedy that is used to correct errors, omissions, or mistakes that have
been made in the recording or registration of a legal document, such as a deed or a contract, or
in the execution of a legal transaction. This can include making corrections to the legal
description of the property, correcting errors in the names of the parties to the transaction, or
making sure that all necessary parties have signed the document. For rectification of a contract
to be granted, an omitted party must be able to provide clear and convincing evidence that the
written agreement does not reflect the parties' final intentions.

For example, in the Pukallus v Cameron case, both parties to a sale of land believed that an area
containing a bore and some 27 acres of cultivated land lay within the portion sold. In fact, they
were mistaken: it was within land retained by the vendor. This was only discovered after
completion of the contract. The purchaser sought rectification of the contract to include the
bore and cultivated land.

The High Court refused the request for a rectification of the contract. The purchaser had not
proven that there was an error in the written contract. The term that he proposed was clearly
inconsistent with the description of the land in the contract and, further, he had failed to prove
where the new boundary line should be. In other words, the contract was exactly as the parties
intended it to be.

In some cases, unilateral mistakes can also be granted rectification. The principles concerning
rectification for unilateral mistake include:

1. If one party, A, enters into an agreement under the mistaken belief that it contains a
specific provision that it does not
2. If the other party, B, is aware of the omission and that it was caused by A's error
 3. If it is in a situation where equity would require B to take some action to alert A to the
error
4. If B chooses to do nothing, A will be in breach of the agreement

Therefore, rectification may be granted for a unilateral mistake by one party where the conduct
of the other party is unconscionable. A specific example is the Vantage Systems Pty Ltd v Priolo
Corporation Pty Ltd case. In that case, the contract mistakenly provided for a licence fee of $375
per year rather than per month. When one party acted unethically in attempting to "take
advantage" of the other party's "obvious and significant error," rectification was allowed.