It would appear from Great Peace Shipping v Tsavliris that it is no longer possible to rescind a contract where any type of mistake has occurred. However the remedy for specific performance can still be awarded.
Specific performance is an equitable remedy ordering parties to continue with the contract it can be refused (as it is discretionary) where one party enters into a contract on the basis of a unilateral mistake an it would be unfair or harsh to expect him to perform the contract, or the other party knew of the mistake and tried to take advantage of it.
Webster v Cecil (1861)
W was offered land by C for £1250 soon after sending the offer letter C realised he should have set the price as £2250 and informed W immediately. W must have been aware of C’s mistake as C had already refused an offer of £2000 from W. Held the court refused specific performance because W had not acted equitably. In that he must have been aware of C’s unilateral mistake and therefore had not come to court with clean hands.
Tamplin v James (1858)
J brought an inn at auction he believed he had also brought adjoining land but hadn’t. He had not made a check of the plans and an order of specific performance was made to make him continue with the contract.
Rectification
Is an equitable remedy available when the parties have made a mistake in the recording of their agreement in writing. Only granted if: -
· There is an agreement by the parties on all points
· The agreement continued unchanged up until it was put into writing
· The writing fails to express the oral agreement of both parties.
Rose v PIM (1953)
P was asked to supply ‘feveroles’ to a customer not knowing what these were they contacted their supply who said that they just meant horsebeans. In fact feveroles were a specific type of horsebean in the contract it only made reference to horsebean. The application for rectification of the contract was refused as the written contract reflected the parties agreement.
Originally rectification could only apply to shared mistakes since the remedy depended on the fact that the written record failed to reflect the intention of the parties.
Roberts v Leicestershire County Council (1961)
Held that rectification could be used where the plaintiff could show that a term beneficial to himself which both parties had intended to be included in the document had been omitted and the other party was aware of the omission at the time the document was being executed.