Contract Law Case Study: Lame Duck Restaurant and Wedding Booking

This case study examines a contract law dispute between the Lame Duck Restaurant and a customer, Li, regarding a wedding booking. The core issue revolves around a pricing error in the quotation provided by the restaurant. The assignment requires the application of the IRAC method (Issue, Rule, Application, Conclusion) to analyze the legal implications of the mistake. The student must determine whether a valid contract was formed, considering the types of mistakes (unilateral, mutual, and common) under contract law. The analysis includes evaluating the enforceability of the contract, the potential remedies available to both parties, and providing legal advice to Johnny, the restaurant owner. The solution considers the principles of offer, acceptance, and the impact of the pricing error on the contract's validity, referencing relevant case laws. The case study aims to assess the student's understanding of contract law principles and their ability to apply them to a real-world scenario, providing a comprehensive legal analysis of the situation.

Running Head: CASE STUDY
CASE STUDY
Name of the Student
Name of the University
Author’s Note

2CASE STUDY
Issue:
The issue in the case is whether there was a mistake.
The second issue in the case is what kind of mistake is there in the case.
Rule:
Mistake in a contract, is successfully proved can lead to the unenforceability of the
contract making it void ab initio or voidable at the option of the mistaken party. there are three
types of mistakes as recognized by the common law:
 Unilateral mistake: this means that one party to the contract has mistaken the terms and
condition of the contract and has acted upon it to discharge the duties1. In general un
derstanding, the unilateral mistake does not affect the validity of the contract. But the
exceptions lie where there has been a gross negligence, or the intentional mistake and
unconscionable mistake.
 Mutual Mistake: this means that both the parties have mutually mistaken the material fact
of the terms and conditions of the contract and has relied upon it for the discharge of their
contractual duties2.
 Common Mistake: this means that both the parties have made a mistaken belief of the
facts related to the terms and conditions of the contrac3t. However, it has been established
that the contract shall be held void only if the mistake of the subject matter renders the
fundamental identity of the contract as altered from what was intended by the parties4. Ry
1 Taylor vs. Johnson [1983] HCA 5
2 Raffles vs. Wichelhaus [1864] 2 Hurl & C 906.
3 Svanosio vs. McNamara [1956] HCA 55.
4 Bell vs. Lever Brothers Ltd [1931] UKHL 2.

3CASE STUDY
Mistake of law is not recognized by the courts because it is assumed that every person is
bound to know the provisions of law without any mistake or exemption. However,
mistake of fact may render the contract as void or voidable depending upon the efficacy
of the contract being affected by virtue of the mistake. All the above discussed mistakes
are mistake of fact and not that of law.
Application:
In the given scenario, since the quotation in the fact is the mistake, the applicable rule is
the mistake of fact wherein the contract shall be voidable at the option of the party. it is a
unilateral mistake exception which means it is a mutual mistake of the parties where, the Li
relied upon the ,menu card of the restaurant and made the offer. The restaurant knew their prices
has been changed and were supposed to know that the menu card may have the old prices and
hence, the contract shall be voidable at the option of the parties. In addition, such mistake from
the parties has amounted to the gross negligence which is affecting Li’s wedding and her
investment in the party. the restaurant was not taking the advantage of Li and hence, the contract
can be set aside at the option of the parties. Thirdly, the mistake is unreasonable and has resulted
in unconscionable consequences affecting Li’s wedding. The fundamental element of the validity
of the contract which is the consideration value, is mistaken by the parties and hence, the
contract shall be voidable at the option of the parties and their mutual agreement.
Conclusion:
It can be concluded in first issue that the there is a mistake of fact.
It can be concluded in the second issue that there is a mutual mistake of fact between the
parties which can be remedied at the option of the parties and their agreeable terms.

4CASE STUDY
BIBLIOGRAPHY:
Case Laws:
Taylor vs. Johnson [1983] HCA 5
Raffles vs. Wichelhaus [1864] 2 Hurl & C 906.
Svanosio vs. McNamara [1956] HCA 55.
Bell vs. Lever Brothers Ltd [1931] UKHL 2.