Legal Issues in Contract Formation

BUSINESS AND
CORPORATIONS
LAW
[Document subtitle]
0
[DATE]
GRIZLI777
[Company address]

Issues
The primary objective is to advice Dan in relation to the below mentioned legal issues.
Does mutual mistake impact the enforceability of contract between Dan and Mary?
Does revoking of offer by Michael result in formation of no legal contract with Dan?
Does signing of written contract by mistake lead to creation of binding legal contract with
Gordon?
Does the display of 2014 Holden Statesman constitute as offer or invitation to treat?
Law
A scenario where mistake has occurred on behalf of both contracting parties is referred to as
mutual mistake. Usually the common examples of this relate to the underlying subject
especially when there are oral contracts without detailing the object to be bought ot sold. As
highlighted in the verdict of Raffles v Wichelhaus(1864) 2 Hurl & C 906 case, such a mistake
leads to the contract being declared void with no liability for either party (Andrews, 2014, p.
65).
The rules of agreement formation for postal mail tend to differ from instantaneous modes of
communication such as email and fax. For an offer communicated through postal media, it
would become effective when received by the intended offeree. The acceptance on part of the
offeror becomes effective immediately when the letter indicating acceptance is posted. This
aspect has been highlighted in the Adams v Lindsell (1818) 106 ER 250 case. As a result,
attempts to revoke the offer after posting the acceptance letter would not be successful
(Davenport and Parker, 2014, p. 133).
A mistake on the part of one party only is referred to as unilateral mistake. If the other party
is aware about the mistake committed by one party, then the same needs to be communicated
as clear from the judgement in Cundy v. Lindsay (1878) 3 App. Cas. 459 case. However, in
case of mistake in signed contracts, the rules applicable are different (Lindgren, 2014, p.
119). A potential defence that may be availed by mistaken party to escape contractual
liabilities is ‘non est factum’. In order to gain relief under this, it needs to be established that
the contents could not be understood, there was special disability and actual content deviation
from assumed content is significant (Latimer, 2016, p. 139).
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