Chapter 23 Self-test questions

. Under which circumstance(s) will a contract not be void due to a common mistake?

Where the risk of an assumption failing has been allocated to one of the parties under the contract.

Where the failure of an assumption is attributable to the fault of one of the parties.

Where one party induces the other party's mistake.

All of the options given are correct.

. Why did the High Court of Australia hold the defendant Commission liable for breach of contract in McRae v Commonwealth Disposals Commission, despite their mistake?

The tanker did not exist.

The claimants were not mistaken.

The Commission bore the risk of the tanker not actually existing.

All of the options given are correct.

. How may section 6 of the Sale of Goods Act 1979 be excluded?

Only by an express term.

Only by an implied term.

By either an express or an implied term.

Section 6 cannot be excluded.

. Will a common assumption as to the value of goods bought or sold be 'basic', if it emerges that the goods are in fact worth much more than the parties have assumed?

Yes.

No.

. According to Lord Atkin in Bell v Lever Bros, there are very limited instances when a contract would be void for the failure of a basic common assumption. Which of the options given was not one of these?

Where the parties are mistaken as to the location of the subject matter.

Where the subject matter does not exist.

Where title to the goods sold does not belong to the seller, but to another person.

Lord Atkin gave all of these examples.

. What is the effect of a common mistake?

The contract is rendered void in all cases.

The contract is rendered voidable in all cases.

The contract is rendered void in most cases.

The contract is terminated from the time when the mistake is discovered.

. On what grounds has Solle v Butcher been criticised?

The requirement of 'fundamental' mistake is unclear.

The case can only be supported by recognising that Bell v Lever Bros was based on an incomplete statement of the law.

It sits uncomfortably with a fundamental principle of common law, caveat emptor.

All of the options given are correct.

. Why is The Great Peace controversial?

It is not clear that the facts of The Great Peace lent themselves to overruling Solle v Butcher.

The Court of Appeal departed from Solle v Butcher, by which it was bound.

Solle v Butcher had introduced a welcome element of remedial flexibility.

All the above

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