Common Mistake Doctrine and Contract Law

This assignment examines a scenario where a customer's jacket is damaged by a dry cleaner. The legal analysis centers on the application of the common mistake doctrine from Australian Commercial Law. The student must demonstrate their understanding of the doctrine, its applicability to this case, and potential remedies available to the wronged party.

PART C
Issue: Codelfa is the plaintiff in this case and he is appointed to work for New South Wales’
State rail Authority. Their contract posited that the defendant is never entitled to make payment
for damages recovery whereby such a damage or stays as a result of events beyond the
defendant’s control. Moreover, it remains imperative for the complainant to provide sufficient
explanation. The Codelfa stood contracted whereby the accuser remained qualified working for
some shifts weekly to work. Nevertheless, an injunction was issued by the other party where
accuser stood compelled to decrease shift amount for which Codelfa was working as well as
incurring additional cost attached to the project. The main issue of accuser was currently
demanding the compensation of the marginal cost consumed in project. The main argument
stood whether there is implied warranty to which damage can be claimed by plaintiff or the
contract is able to be perceived as frustrated due to injunctions.
Rules: This case is pitting Codelfa Construction Pty. Ltd against State Rail Authority of NSW
(1982) 149 CLR 3371.They made the contract under the s.11 of New South Wales’ City and
Suburban Electric Railways Act 1967. Moreover, once the contract is established, it can never be
changed in absence of both parties. Also, it is needed to embrace for novel paper work if an
alteration in rules, procedure as well as regulations is to be made. Implied contract describe
terms alongside conditions which are never stated precisely in contact yet aligns to desired
intention of each party. The terms can be in the form of following:
 In law: it stays applicable automatically according to state law on 1 or more acts thus
known to each party.
1Codelfa Construction Pty. Ltd. V State Rail Authority of NSW (1982) 149 CLR 337

 In fact: The intention exists to encompass yet has never been integrated as a matter
of reasonability or fact2.
 By custom: The customary facts remain applicable to any kinds of conduct or
business, yet has to be known to each party.
 By statute: Is needed for statute’s sake and stays usually expunged from the
contract’s legislation.
Frustration remains another imperative elements of rule for this scenario. Here, the
contract is perceived as frustrated if capability is lost for being undertaken. Such are events
which occur as a results fault of neither party. Based on frustration doctrine, the contract stays
terminated automatically while the termination loss lies in 1 party’s hands as applied in Taylor v
Caldwell (1863) 3 B & S 826 case.
Application: The issues mentioned are considered in Codelfa Construction Pty. Ltd. V State Rail
Authority of New South Wales (1982) 149 CLR 337. Here, the status was looked upon by the
court whereby rules of implied contract remain applicable if accuser is permitted to for sufficient
hours. Thus, it stood the shared assumption by each party. Nevertheless, such terms were
unrequired to be adequately reasonable anchored upon which the court can make a decision.
The court, in this case stood increasingly inclined towards frustration doctrine to make a decision
instead of implied contracts’ regulations and rules. The related event remained wholly inclined to
injunctions granting. Contract performance according novel scenario whereby hours stood
decreased remained different completely from the performance scenario in contract
contemplation. Thus, the court ruled in Codelfa’s favour.
2 Turner, M., 2016. Commercial Dealings with Government: The Cautionary Tale of Victoria v.
Tatts. Macquarie LJ, 16. p.155.

Conclusion: The court’s decision was anchored on frustration doctrine. Thus, the Codelfa stood
liable for compensation for the additional cost he incurred. Therefore, he was compensated for
work for worked value to grant injunctions.
My ANSWER
PART E
Issue: The case’s issue is about Sam’s experience at Rapid clean Pty ltd drycleaners. It is stated
by the assistant that they will never take any responsibility of the cloth in case anything occurs to
jacket in the course of cleaning. Though, it was written by the assistant at the receipt back that
there was no responsibility for stains’ removal by the drycleaners, Jane’s staff, who lacked
adequate training torn the jacket as he cleaned it. The damage was noticed by Sam while
assistant read back the note with human behaviour for concealing blunder.
Rules: Here, it is suggested by the common law that common mistake doctrine in Australian
Commercial Law applies3. This doctrine states that mistake might be about a fundamental that it
has caused damage to nature quality value of a substance inadvertently. Nevertheless, here, the
upset party tends to be compensated from another party as the respite whereby the Court puts the
contract aside whereas making judgment4. Taylor V. Johnson is a common case law in which the
ruling was based on common mistake doctrine. Rosewell State bank v. Lawrence Walker Cotton
Co is another example. Bell v Lever Brothers Ltd ofHouse of Lords.[Case 3] posited that common
mistake may result in a contract void solely where subject-matter mistake stood adequately
3 Newell, C., 2016. What to do in a multiple offer scenario. REIQ Journal, (Dec 2016-Jan 2017), p.36.
4 Baron, A., 2014. The Australian International Arbitration Act, the Fiction of Severability and Claims for
Restitution. Arbitration International. 16(2).s pp.159-188.

fundamental for rendering its identity unlike what stayed contracted. This further made the
contract performance unbearable like Sam’s case.
Applicability: The above-mentioned rule is thoroughly applicable to Sam’s case because the
drycleaners damaged the jacket. They stated that no responsibility would be taken for stains.
Nevertheless, it remained intimated verbally to Sam regarding no responsibility for the cloth.
Thus, here, Jane made a mistake as he gave jacket to be dry-cleaned to untrained staff. Thus, this
is a typical case of common mistake dry cleaners performed. Therefore, according to Australian
Commercial Law, the remedy s grantable to Sam.
Conclusion: It is deducted that mistake arises under common mistake doctrine and that Sam
stood the upset party. Sam is, hence, liable for recompense by the drycleaners. In case the Court
is moved by Sam, the Court will give him commensurate remedy according to damages being
undertaken by drycleaner. Such a mistake is remedied based on Australian Commercial law.
Further, it is able to trigger arguments into questions as well as void the contract.