Contract Void For Mutual Mistake

mistake twice

Mutual mistake may void a contract.

The law of mutual mistake is set out in Bell v. Lever Bros., [ 1932] A.C. 161, and Dyson v. Moser, 2003 BCSC 1720.

A contract will be void from the start for mistake if a mistake by both parties to the contract renders the subject matter of the contract fundamentally different from that which both parties believed to exist at the time they entered into the contract, so long as the party seeking to set it aside was not at fault for the mistake

The executors bought court action re a complicated buy- sell agreement.

The court dismissed most of the action on the basis that both parties to the purported contract were mistaken about a fundamental term, the pice, and thus the contract void as there was no consensus ad item between the two parties

The failure to agree on the terms on which the purchase price would be paid, an essential term, means that there was no enforceable contract.

As a result, the parties did not reach a binding agreement on the terms for RR to buy BK’s shares in Kraft through the exchange of letters dated March 8,2007 and April 18,2007.
If so, was there a mutual mistake about something fundamental to that contract?


Trevor Todd

Trevor Todd is one of the province’s most esteemed estate litigation lawyers. He has spent more than 40 years helping the disinherited contest wills and transfers – and win. From his Kerrisdale office, which looks more like an eclectic art gallery than a lawyer’s office, Trevor empowers claimants and restores dignity to families across BC. He is a mentor to young entrepreneurs and an art buff who supports starving artists the world over. He has an eye for talent and a heart for giving back.

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