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

5. Mistake

5.6. Equitable relief for unilateral mistake

 

 

 

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

A offers to sell Australian rabbit skins to B. During negotiations, a price of somewhere between 20 - 30 cents per piece is discussed. This is the way rabbit skins are priced in the trade. However, when the final offer is put in writing and sent to B, the price is stated as 25 cents per pound, about a third of the price per piece. B, realising that whoever typed the contract has typed 'pound' by mistake, says nothing about this and simply accepts A's offer. A, discovering her error, refuses to perform the contract. B sues to enforce it.

Is A entitled to relief in these circumstances?

(a) Yes. Only A is mistaken about the terms of the contract, but B knew that there had been an error. Good conscience required B to draw A's attention to the error. Because B has acted unconscionably, he will not be allowed to enforce the contract.

(b) No. The contract contained terms that were perfectly clear. If these terms were different from what A had intended, it is her own fault that she was mistaken. Equity will not assist her in these circumstances.

 

 

 

 

 

  
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