Chapter 13 Multiple-choice questions

Non-agreement mistake
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. A 'common mistake', also called 'mutual mistake', is a mistake that prevents an agreement from being reached by the parties.

. Before considering the possible operation of the doctrine of common mistake, a court must first determine whether the contract has allocated the risk of the mistake to one or other of the parties.

. A owns a tanker that has suffered a massive engine explosion. A finds out from an independent source that a ship owned by B is the closest vessel to the stricken tanker. B agrees to divert his vessel in order to render assistance to the crew of A's tanker, provided A will agree to a minimum hire charge of £50,000, 'irrespective of whether B's vessel is used or not'. A accepts B's offer but finds out within minutes that his tanker has already sunk with the loss of all hands. Which one of the following statements most accurately represents the legal position of A?

. Which one of the following statements is inconsistent with the decision in Couturier v Hastie (1856) 5 HL 673?

. The equitable doctrine of common mistake, as established by Denning LJ in Solle v Butcher [1950] 1 KB 671, had solid foundation in precedent.

. A, a dealer in antiques, places a painting in his shop window priced at £10,000. A thinks that the painting may be by Arthur Frier, a local artist whose paintings are now being sought by professional collectors, but as he is not certain of the painter's identity, he decides not to place any label on the painting. B enters the shop and says: 'That looks like a Frier to me, I'll take it.' A does not reply. B pays the price of £10,000 in cash. B now discovers that the painting is not by Frier and seeks a full refund. Which one of the following statements most accurately summarizes the legal position?

. In which one of the following cases was the equitable jurisdiction to set aside a contract for 'fundamental' common mistake explicitly denied by the court for the first time?

. The English courts recognise the theoretical basis of the doctrine of common mistake, as in the case of the doctrine of frustration, as being based on an implied term that the contract will not be binding in certain circumstances.

. A recently inherited a large sum of money on the death of her uncle. She decides to purchase a specific painting from B, the owner of an art gallery. B assures A that the painting is genuine and worth £1,000,000. A decides to purchase the painting without consulting an independent expert. The painting turns out to be a forgery and worth only £10,000. Which one of the following statements probably summarises the position between the parties?

. It is generally true that, in a sale of goods contract, in the event of either non-existence or perishing of the subject matter, the contract will always be void.

. Which of the following statements concerning the relationship between the doctrine of common mistake and the doctrine of frustration are true? [Please select all that apply.]

. A contract can be rendered void by common mistake only when it has not allocated the risk of the relevant mistake to one or other of the parties. In which one of the following cases was the contract rendered void by common mistake?

. Which of the following statements concerning the decision of the House of Lords in Bell v Lever Brothers Ltd [1932] AC 161 are true? [Please select all that apply.]

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