refusing to follow Great Peace, the controversy surrounding common mistake is still existent in
Canada, since the court did not offer a solution to this controversy.
The United States of America has implemented legislation101 to deal with the area of common
mistake in contract law. Section 152(1) of the Restatement 2d of Contracts provides:
“Where a mistake of both parties at the time a contract was made as to a basic
assumption on which the contract was made has a material effect on the agreed exchange
of performances, the contract is voidable by the adversely affected party unless he bears
the risk of the mistake. . .”
The United States’ approach can be commended, in that it seeks to solve the problems caused by
Belle and Solle, and has implemented legislation to deal with common mistake. The concept of
the mistake being fundamental in Bell and Solle is replaced by the phrase “…has a material
effect on the agreed exchange of performance.” Thus the mistake must substantially affect the
intended performance by each party. This gives the courts a clearer understanding of when a
mistake is ‘fundamental.’ The legislation goes further to say that if this is satisfied then the
remedy is that the contract would be voidable by the affected party unless he bore the risk of the
mistake. However a great injustice occurs to parties seeking relief, when their contract expressly
or impliedly provides for a risk of mistake, and provides that they were deemed to have known
and assumed the risk. These parties would have to bear the risk of the mistake whether they
knew of it or not. Thus in this respect the legislation does not go far enough to protect parties to a
contract.
Thus, it is deduced that excluding the United States of America, the majority of jurisdictions are
still perplexed about the area of common mistake and are finding it difficult to come to a fixed
premise in this area of law. The practice of ‘selective jurisprudence’ is not the answer to the
controversy on common mistake. ‘Selective jurisprudence’ is not enhancing the law, it is simply
choosing one of the several deficient portrayals of the law and attempting to abide by it. There is
a need for a solution to the Great Peace controversy and it lies in sound and well thought out
legislative intervention.
101
(1981) [Restatement 2d of Contracts].
73