the formation of a contract, or implied condition precedent problems, where the court holds that there is an implied condition that, for example, the object of the contract is in existence or is of a certain quality (see Financings Ltd v Stimson, below). In these situations, the common law is saying either that there never was a contract or, if there was, it has imploded as a result of the condition precedent. The common law, in other words, is declaring the contract void. 2 Equity, however, can, since Solle v Butcher, intervene with its remedy of rescission (see p 256). Here, the contract will be voidable rather than void. Is this dual approach now outdated? Ought the courts to start thinking in terms of a substantive doctrine of error? 3 Before answering the questions posed above, consider the following problem. B sees an old painting in a junk shop and asks P, the owner, how much he wants for it. P says he thinks the painting is by a minor artist and is worth around £500, and he offers it to B for £480 which B readily accepts. Having purchased the picture, B takes it to an antiques expert for a valuation and the expert says that the picture is a missing masterpiece by a major artist and is worth at least £1 million. The find is widely reported in the press and P is much put out. Can P ask for the contract to be set aside? Would your answer be different if B had verbally agreed with P that the painting was by a minor artist knowing full well that it was not? 4 When viewed from the position of the English substantive law of contract, mistake may seem to lack any fundamental principles. If one shifts to the law of remedies, the position changes quite dramatically, in that there are a number of remedies which become available depending on the kind of error in issue. If the source of the error is a statement by one of the contracting parties (‘this painting is by Constable’ or ‘this car has done only 20,000 miles’) then there may be remedies for misrepresentation or, sometimes, for breach of contract (see Dick Bentley, above, p 467). If the source of the error cannot be attributed to a pre-contractual statement, then one of the parties will usually be seeking either to have the contract declared void (an action for a declaration) or to enforce a contract that the other party is refusing to perform (specific performance or damages). If the error concerns a document, a special defence of non est factum (this is not my deed) comes into play; and if the mistake concerns the identity of a person, the tort of conversion is usually the remedy in play, since mistake of identity often involves property problems. In fact, many cases involving non est factum and mistake of identity deserve to be classed more in the law of property than the law of obligations. Why do you think it is that the common law distinguishes between misrepresentation and mistake? 5 One fundamental remedy distinction that must always be borne in mind when dealing with mistake and misrepresentation problems is the difference between the remedy of damages at common law and the remedy of rescission in equity (see Chapter 3). A party who has entered a contract
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