difficulties of interpretation, with respect to principles of law and equity. Thus, common mistake
as to the quality of contract led to the controversy surrounding common mistake as will be
explored in this paper.
At the common law, a common mistake was one which must have been operative, to have the
contract declared as void. This was the legal principle arising from the House of Lord’s decision
in the case of Bell v Lever Bros. Ltd.76As Lord Atkin stated,
“…a mistake will not affect assent unless it is the mistake of both parties and is as to the
existence of some quality which makes the thing without the quality essentially different
(emphasis added) from the thing as it was believed to be.”
Conversely, the Court of Appeal in the case of Solle v Butcher77 developed the principle that if
the mistake was not fundamental enough to have the contract declared as void at law, then equity
would provide a route whereby the contract could be declared as voidable. As Lord Denning put
it in the case of Solle,
“A contract is also liable in equity to be set aside if the parties were under a common
misapprehension either as to the facts or as to their relative and respective rights,
provided that the misapprehension was fundamental, (emphasis added) and that the
party seeking to set it aside was not himself at fault.”
Thus, in essence even if the mistake was not operative at law to void the contract, the mistake
may still be regarded as sufficient to declare the contract as voidable by the court of equity.
Naturally, the result of this dichotomy caused the law of common mistake to be in a state of flux,
since there was developing a multitude of ‘selective jurisprudence’ on the law of common
mistake, where the courts were choosing to follow either Bell or Solle and reject the other.
Consequently, the Court of Appeal judgement in the case of Great Peace Shipping Ltd. v
Tsalvris Salvage (International) Ltd78.attempted to resolve these ambiguities. This case
concerned a common mistake made by the parties to the contract, and the court recognising the
difficulties posed by the precedent on common mistake, decided to make a bold and somewhat
76
[1932] AC 161
[1950] 1 KB 671
78
[2002] EWCA Civ 1407; [2003] QB 679
77
60