Chapter 8 Guidance for end of chapter questions

Mistake

Question

Angus lives in London and owns a large Scottish estate ideal for grouse shooting which includes Loch Tavish, the mythical home of Tav, a 60-foot-long prehistoric throw-back. Sportshoots Ltd organize shooting trips for American tourists and approach Angus for the shooting rights over his estate in July and August. Their representative tells Angus that they are the large multinational company Shootokill plc in order to impress him and secure the contract against other rival firms. On 31 July, Angus says that he is very impressed with their bid and believes that they will be a responsible company who will take care on his land, signing a contract for the lease of his estate, along with shooting rights, for £1,000.

Unknown to either party, the previous day, a BBC film crew caught a picture of Tav surfacing from the Loch and feeding on two Shetland ponies. The film is shown on the next edition of Panorama and Angus is interviewed on Newsnight by Jeremy Paxman, with many other networks offering him vast sums of money for exclusive filming rights over his land. Sportshoot advertises in the USA using the slogan ‘Scottish Dragon Slaying’ and thousands of tourists sign up to be the first to take Tav as a trophy. Angus decides that he can get far more money from leasing his land to the television companies and that he does not want Tav to get hurt so he tells Sportshoot that their contract is over. Discuss.

Answer

This question illustrates two quite different types of mistake. There is the common mistake shared by the parties that any monster associated with the estate and Loch is an entirely mythical one whereas it has now transpired that it actually exists and has a healthy appetite. In addition it appears that Angus is labouring under the unilateral mistake as to the identity of the company he is dealing with, believing it to be the multinational Shootokill plc rather than the presumably lesser known, Sportshoots Ltd.

Common mistake

Whilst in once sense this may seem like a common mistake as to existence (the existence of the monster, Tav) this is not the subject of the contract which is actually a contract about a lease of land and shooting rights, so the law associated with cases such as Couturier v Hastie is not terribly relevant. Instead the case of Bell v Lever Bros should be your starting point and the question of whether a mistake as to quality (whether the estate includes a mythical or real monster) can render the contract void so freeing Angus to make a fresh contract with whoever he chooses. Although any one faced with a real prehistoric monster rather than a mythical one may consider their mistake to be fairly fundamental, that does not mean it is fundamental in law as the facts of Bell v Lever Bros themselves show. Even in the context of a contract to pay termination compensation, the fact that the contracts could have been legally terminated for nothing was not sufficiently fundamental. However, the law has not ruled out mistakes of fact ever being sufficiently fundamental. 

You should refer to the examples discussed in the text at 8.4.1 such as the sale of a racehorse that in fact turns out to be a carthorse (fundamental) as opposed to the sale of a horse believed wrongly to be sound (not fundamental). Griffith v Brymer also provides a rare example of a mistake being regarded as sufficiently fundamental (the cancellation of the procession which was the only point of hiring the room) but again that does not seem analogous to the facts of the question. That case might be more in point if the situation had been the reverse of the actual situation, e.g. if the contract had been made on the basis that there was a monster (no doubt the price then would have been much higher) but then it was proven that it did not exist. 

However having discussed Bell v Lever Bros And the older case law it is essential that you go on to discuss the more recent case of The Great Peace and the fivefold test set out by Lord Phillips.

Whilst the first part of the test is not problematic (the common assumption as to the existence of a state of affairs), and neither are points 2 and 3 since neither party appears to be at fault or to have warranted anything relating to the non-existence of the monster, point 4 and 5 relating to the possibility or impossibility of the contract being performed seem very unlikely to be satisfied. On the basis that the contract is perfectly possible to perform and the mistake is essentially about the marketable/publicity value of the land being leased, the common mistake does not seem one on which Angus can rely to avoid the contract, the conclusion on the facts of The Great Peace also.

One final point to note about common mistake is that there is now no room for argument that even if the mistake is not sufficiently fundamental to render the contract void at common law, that it might be enough to render it voidable in Equity as per Lord Denning in Solle v Butcher since that approach was expressly overruled by the Court of Appeal in The Great Peace.

Mistake as to Identity

The issue here is rather different from the typical mistaken identity case where the reason for wanting to show that there is no contract with the “rogue” but only with the person who the mistaken party thought he was contracting with, is that the rogue has disappeared with the goods and purported to give a good title to a third party. That issue does not really arise here but nonetheless you should show you are aware of the factors the courts have used in deciding whether a mistake as to identity does render the contract void in cases such as Cundy v Lindsay, Kings Norton Metal v Edridge, Philips v Brooks, Ingram v Little, Lewis v Averay and most importantly now, the House of Lords decision in Shogun Finance v Hudson. On the facts of the problem, although the firm which Angus may have thought he was dealing does exist (Shootokill plc) and therefore one might say he only intended to contract with them, it does appear that he has concluded a written contract with Sportshoot as the question says that he “tells Sportshoot that their contract is over” so he clearly knew he was dealing with that company even if he had been misled as to who they were owned by or associated with by what the representative told him. It is thus unlikely that the contract will be void and indeed there is no need for the contract to be void in this case since there are other ways of providing relief to Angus since there are no third parties involved.

Although in the context of common mistake there is clearly now no alternative of the contract being voidable in equity, in the case of mistaken identity it is equally clear that the innocent party will normally have the right to avoid the contract due to misrepresentation. Normally this alternative is not much use where the rogue has sold the subject matter to a third party but in our case Angus can be advised of his right to rescind the contract for the misrepresentation of fact that  Sportshoot are part of Shootokill, and this will be sufficient for his purposes.