Business and Corporations Law

BUSINESS AND
CORPORATIONS
LAW
STUDENT ID:
[Pick the date]

BUSINESS AND CORPORATIONS LAW
Issues
Based on the given scenario, Dan needs to be tendered legal advice for legal issues stated
below.
 Have Mary and Dan enacted an enforceable contract for 2002 Honda Jazz sale despite
mutual mistake?
 Have Michael and Dan entered into a legally binding contract for 2015 Toyota CX truck
sale before revocation of offer?
 Have Gordon and Dan enacted a binding contract or it can be declared void on account of
Dan’s unilateral mistake?
 Have Edgar and Dan entered into a legally binding contract for 2014 Holden Statesman
sale based on Edgar’s statement?
Law
There are different kinds of mistakes with differing implications for the contract formation.
Mutual mistake refers to a situation when both contracting parties make a mistake. One of the
key instances of mutual mistake may relate to the underlying object of contract. In such
fundamental mutual mistake, the contract would be declared void and hence no contractual
liability arises for any of the parties. This is as per the verdict in the Raffles v Wichelhaus
(1864) 2 Hurl & C 906 cases where mutual mistake related to the description of type of
cotton (Taylor & Taylor, 2015, p. 78).
Amongst the various communication means available for offer and acceptance, one of these
is postal mail. As per the applicable rules to agreements based on postal mail, offer would
become effective only on receipt by offeree. Usually, when the offer is communicated
through post, acceptance is also required through post. With regards to acceptance, the time
at which the acceptance letter is posted, it is deemed to be effective and thereby contract
formation is complete (Carter, 2016, p.88). This is in accordance with the Adams v Lindsell
(1818) 106 ER 250 case. Any revocation of offer after posting the acceptance is not possible
(Gibson and Fraser, p. 67).
A unilateral mistake refers to a scenario where only one contracting party is mistaken. In such
a situation, there is obligation on the other party to inform the mistaken party about the
mistake if the other party has knowledge about it. This is highlighted in the verdict of Cundy
v. Lindsay (1878) 3 App. Cas. 459 case. If a written document is signed by mistake, then