Exam 21: Common Mistake: Contracts Void for Failure of a Basic Contractual Assumption

If both parties to a contract are mistaken about the quality of the goods which form the subject of the contract, it is void.

A asks for tenders for the renovation of a houseboat. B makes the successful tender and begins to incur expenditure in anticipation of the renovation job. Unbeknownst to both A and B, the houseboat sank without a trace before they had contracted. Which of the following outcomes is likely?

A sells an old vase to B and both parties believe that it is nothing special. B subsequently discovers that the vase is a precious antique from China and worth millions. What is the effect of this discovery on the contract?

Raymond agrees to sell Damian his entire potato harvest in return for £1000 upon their return from a holiday. Unbeknownst to either party, Raymond's potato farm has been devastated by disease and there are only a handful of healthy potatoes left at the time the contract is made. Damian believes he is nevertheless bound to pay the full price for the miserable harvest. Is this true?

As a matter of precedent, the Court of Appeal in The Great Peace should not have been able to depart from Solle v Butcher.

If both parties to a contract are mistaken about the ownership of the goods which form the subject of the contract, it is void.

Which of the following elements must be present in order to establish common mistake? Please select all that apply.

A contract concluded on the basis of a common mistake may be voidable.