First Principles of Business Law
Circumstances that may invalidate a legal transaction

5. Mistake

5.2. Mutual mistake

 

 

 

Read the facts and the question and then choose the best answer.

A, a tourist, visits B's art gallery in Alice Springs. Seeing a painting he likes, A tells B that he is visiting from New Zealand and asks what the painting costs. B says $10,000. B has Australian dollars in mind, although he does not say this. A assumes that B is quoting the price in New Zealand dollars. He thinks the price is reasonable and says he will buy the painting. When A tries to pay $10,000 New Zealand dollars, B says there has been a mistake, and that the price in New Zealand dollars is $13,000 (the New Zealand dollar being worth less than the Australian dollar). A insists there is a binding contract to sell the painting for $10,000 New Zealand dollars.

On these facts, have A and B agreed on the price of the painting?

(a) Yes. It is clear on the facts that the parties have agreed on a price of $10,000 Australian dollars.

(b) Yes. It is clear on the facts that the parties have agreed on $10,000 New Zealand dollars.

(c) No. It is not clear on the facts whether Australian dollars or New Zealand dollars was the agreed currency.

 

 

 

 

 

 
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