existence, or a vital attribute, of the consideration to be provided or the circumstance which
must subsist if performance of the contractual adventure is to be possible.”89
Great Peace can be commended for bringing about a measure of certainty in the law of common
mistake, and it has been proposed by academic writers90 that its decision has overruled Solle, and
thus the doctrine of equity in this area of law is essentially now diminished. The irony is that
Great Peace in an attempt to clarify the law on common mistake, in fact went too far in
establishing these list of guidelines which have proven to be extremely difficult, even impossible
to satisfy, and this has potentially eliminated the doctrine of common mistake and brought it to a
vanishing point.
There were several cases that applied the test set out in Great Peace, following its decision and
one can easily predict that those who were seeking to have the contract declared void due to a
common mistake in these cases ultimately failed, because they could not satisfy the extreme test
as set out in Great Peace.
One such case was Kyle Bay Ltd (T/A Astons Nightclub) v Underwriters Subscribing Under
Policy Number 019057/08/01.91 The facts of the case are as follows: When a nightclub was
destroyed by fire, the appellants (nightclub owners) realized that they were privy to a different
type of insurance cover than what they thought they had agreed to. They then agreed with the
respondents to compromise the claim for £205,000, which was significantly less than they would
have been entitled to had the original insurance scheme been in place. However, it was then
discovered that the original insurance scheme was in fact in existence and the appellants were
actually entitled to the larger sum of coverage than what they settled for in the compromise
agreement. Thus, the both parties were under a common mistake as to the nature of this
agreement. The court in keeping with the Great Peace decision held that the mistake in the
present case was not fundamental to have the compromise agreement void. This was because
since the settlement compromise remained capable of performance at all times, the subject matter
was not made ‘essentially and radically different’ by the mistake.
89
Ibid, para 76
Ewan Mckendrick,Contract Law:Text, Cases and Materials (4thed, Oxford) pg. 544
91
[2007] EWCA Civ 57; [2007] All ER (D) 93 (Feb)
90
69