MISTAKE
S21, S22, S23
1
S21
S22
S23
• Agreement void where
both parties are under
mistake as to matter of fact
• A contract is not voidable because it
was caused by mistake as to any
law in force in Malaysia
• A contract is not voidable
merely because it was
caused by one of the parties
to it being a mistake as to a
matter of fact
2
Mistake as to the
identity of the
subject-matter
Mistake as to the
identity of the other
party
Mistake as to the
existence of the
subject-matter
Mistake as to the
nature of the
document
3
Mistake as to the identity of the subject-matter
• Raffles v Wichelhaus
W agreed to buy cotton ‘ to arrive on the
Peerless sailing from Bombay. W intended
the ship Peerless sailing from Bombay in
October
R offered the cotton from
another ship Peerless sailing
in December.
Held:
That there was binding contract between the parties
as the defendant meant one ship and the plaintiff
another
4
Mistake as to the existence of the subject-matter
Couturier v Hastie
A contract was made between two
parties for sale of Indian corn,
which, at the time, was believed to
be on the high seas. Unknown to
both parties the corn had become
overheated during the voyage and
had been landed at the nearest port
and sold.
Held:
That there was no contract.
5
Mistake as to the identity of the other party
Its depends on
whether the identity
of the party(B) is
material to the
contract in the sense
that A intended to
contract with B and
no other person.
(Boulton v Jones)
A intends to
contract with B,
but by mistake
contracts with C.
6
Phillips v Brooks
A rogue, X, entered a jeweller’s shop to purchase
jewellery.The rogue offered to pay by cheque. The
cheque was accepted by the jeweller who said
delivery would be delayed until the cheque was
cleared by the bank. The rogue said ‘I am Sir George
Bullough’, and gave an adress at St. James’Square.
He asked to take some of the jewels with him.
The jeweller agreed, and the rogue then went to Brooks.
Ltd and pawned them a sum of money. The cheque later
proved worthless. The jeweller then sued the pawnbroker
for the jewels. Held: that Brooks obtained a good title.
The contract was not void for mistake but voidable for
fraud. At the time of the contract the jeweller intended to
deal with the person physically in his shop and his
identity was immaterial.
7
Mistake as to the nature of the document
The general rule of law is
that a person is bound by
the terms of any instrument
which he signs. This is so
even the signer did not
read the document or did
not understood its contents
8