What happens if I have made a mistake when entering into a
If you believe that you should not have entered into a
contract but that the terms of the
contract are correct then you will need to look fully at the terms
and conditions concerning cancellation and termination of the
What happens if there is a mistake in the contract I have
If the contract that you have entered into contains a mistake
then it may affect the validity of the contract. What will happen
concerning the validity of a contract will depend on the nature and
the kind of mistake made but in most cases this will result in the
contract being void.
What is meant by mistake?
Mistake in contract can be broken down to into the following four
- Common Mistakes
- Unilateral Mistakes
- Mutual Mistakes
- Mistakes relating to Identity
In the situation of a common mistake the parties are in agreement
with each other but have entered into the contract upon the same
misapprehension, i.e. they have both relied on the mistake when
entering into the contract. In the case of a common mistake which
“goes right to the root of the contract” this will result in the
contract being void as the mistake was fundamental to the contract.
The following common mistakes will cause the contract to become
- Mistake in relation to the existence of the subject matter –
where the subject matter of the contract does not exist of
ceases to exist the contract will be void at common law
- Mistake in relation to the title – in the case where the
contract is to transfer property from one person to another but
the second person in fact already owns the property but neither
party was aware of this the contract will be void at common law
- Mistake in relation to the performing of the contract – if
the obligations specified within a contract are in fact
impossible to perform then the contract will be void at common
What is the case concerning a mistake in relation to the quality
of the subject matter of a contract?
If the mistake is in relation to the quality of the subject
matter of the contract then the contract will still be valid at
common law. An example of this is a contract between two people for
the sale of a painting where both parties believed the painting to
be painted by a particular artist. The fact that there was a mistake
in relation to the artist would not make the contract void at common
The only way a contract will be void due to a mistake in relation
to the quality of the subject matter if the quality of the goods was
fundamental to the contract.
- A unilateral mistake is where one party is mistaken while
the other party is aware of this mistake and takes advantage of
it when forming the contract. A unilateral mistake of this
manner will eliminate the consent required for the proper
formation of a contract meaning that there is no contract in
- In order for a contract to be void due to a unilateral
mistake the mistake must relate to the terms and conditions of
the contract. A unilateral mistake in relation to the quality of
the subject matter of a contract will not result in the contract
- It is not enough for one party simply to be mistaken in
relation to the terms and conditions of a contract. For the
contract to be void due to the unilateral mistake the other
party must have been aware of this mistake and then used it to
their advantage in forming the contract.
- A mutual mistake is a misunderstanding between the parties
entering into a contract as to the intentions of the other
party. A mutual mistake between the parties will eliminate the
consent required for the proper formation of a contract meaning
that there is no contract in existence.
- Where there is problems understanding what the agreement
actually relates to an objective test will be applies asking the
question what a reasonable third party would take the contract
- If the mutual mistake relates to the identity of the subject
matter the contract will be held to be void. If the mutual
mistake relates to the quality of the subject matter the
contract is unlikely to be held to be void.
Mistakes relating to Identity
- A contract will become void at common law where a mistake
was made in relation to the identity of the other party with
whom the contract is made and that the identity of that person
is central to the formation of the contract.
- This is difficult to prove as a lot of the time when forming
a contract the parties will meet in person. When this is the
case there is a presumption that you have intended to do
business with the person in their presence making it very
difficult for the contract to be deemed void.