ABSTRACT
One of the underlying principles of contract law is caveat emptor (‘let the buyer beware’) and therefore there should be no reason why a party should not be bound to carry out what he or she had promised even though an unforeseen event has made that impossible. However, there can be situations where a contract can be avoided on the ground that one or both parties have made a mistake, either a unilateral mistake, a mutual mistake or a common mistake. In order for a common mistake to be operative, the mistake must make the subject matter of the contract different in substance from what the parties believed they were contracting for, so that it is impossible for the contract to be performed, as the subject matter of the contract ceased to be in existence at the time the contract was entered into. If the mistake relates merely to one of the qualities possessed by the subject matter, without rendering it substantially different, then the contract will not be void. A unilateral mistake is where one party makes a mistake, for example, as to the identity of the other party, while a mutual mistake is where one party thinks the contract is made on one set of terms while the other thinks it is made on another set of terms. Until recently, it was held that a common mistake, while not making the contract void at common law, could make it voidable in equity, following the decision in Solle v Butcher (1949). However, in Great Peace Shipping v Tsavliris (2002), the Court of Appeal refused to recognise the existence of a doctrine of equitable mistake and the decision in Solle v Butcher is no longer good authority.
