Legal Issues and Mistakes in Contract Formation

Issue
There are four issues in the present case which need to be resolved through legal advice.
Issue 1: Whether Mary and Dan enacted a enforceable contract considering their mutual
mistake regarding the colour of 2002 Honda Jazz.
Issue 2: Whether Michael and Dan have entered into a contractual relation considering that
Michael has revoked the offer and do not want to purchase the truck from him.
Issue 3: Whether Gordon and Dan have formed a legal contract irrespective of the fact that
Dan did not want to sell the truck and mistakenly sign the document of contract.
Issue 4: Whether Edgar and Dan are bound into contract even if Dan does not want to sell the
2014 Holden Statesman for $10,000.
Law
In some instances, contracting parties also make some mistakes while enacting the contract.
These mistakes can be common, mutual or unilateral. As the name suggests, mutual mistakes
are those which have been done by both offeror and offeree. It generally incurs from the
contractual objects as offeror and offeree are taking about two different things and enact the
contract with their own assumptions rather than clarifying from each other. In such cases, the
contract would be void and parties are not liable for any contractual duties as witnessed in
Raffles v Wichelhaus(1864) 2 Hurl & C 906 case (Carter, 2016, p. 141).
In accordance with the postal rule, offer is considered to be enforceable when it has reached
to the offeree whereas acceptance will be enforceable when the offeree posts the acceptance
letter to offeror. The data on which the acceptance letter is actually received by the offeror is
immaterial. Further, the offeror cannot revoke/cancel the offer once it has been accepted on
behalf of the offeree. This understanding is highlighted in the verdict of Adams v Lindsell
(1818) 106 ER 250 case (Andrews, 2014, p. 98).
Unilateral mistake is the one which is made by only one party. It is responsibility of the other
party to bring the notice of the other mistaken party about the incurred mistake, if the party is
well aware about the mistake. This factual information has been derived from the verdict of
Cundy v. Lindsay (1878) 3 App. Cas. 459 case (Lindgren, 2014, p. 175). One of the common
unilateral mistakes made by the party relates to mistakenly sign an unintended written
contract. In this regards, the non-est factum defence is taken into consideration to provide
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