Contract Law: Reasonable Mistakes and Invalidity

In Dickinson Motors v. Obahozer case, both parties were fully aware of the car's true owner.

Common mistake allows either party to rescind the contract, even if the mistake is minor.

Rectification can be granted by the court if there are substantial errors in the written contract.

Obahozer paid 291 pounds to Dickinson Motors for a car his son owed money on.

In the Dickinson Motors case, Obahozer received a different car than the one he thought he was getting.

The court ordered Dickinson Motors to repay Obahozer 291 pounds because of a common mistake regarding a vital matter in the transaction.

A reasonable mistake is known as a Justus error.

In the case Logan v Beit 1890 7 SC/AC 19, a mistake made by one party due to their own carelessness is considered reasonable.

Yelierton 1972(4) SA 114 states that reasonableness should not be decided on the facts of each case.

A person may deny the existence of a contract if they are estopped from doing so.

Unilateral mistake occurs when both parties are mistaken.

According to George v Fairmead at 471, the mistaken party can be bound by the contract based on quasi mutual asset.

Unilateral mistake can always vitiate a contract, regardless of the circumstances.

According to National and Overseas Distributors Cooperation Pty Ltd v Potato Board, a unilateral mistake can vitiate a contract if the other party induced the mistake by misrepresentation.

The scope for a degree of unilateral mistake is wide and covers various situations according to Lamdsbergen v Van der Walt.

Mutual mistake occurs when only one party is mistaken about the other's intention.

A unilateral mistake must be reasonable in order to vitiate a contract.

In the case of Lamdsbergen v Van der Walt, it was held that any mistake, regardless of its materiality, can release the mistaken party from the contract.