Negligent Misrepresentation in Kirimu Estate (UG) Ltd.v.K.G.Korde

10 Questions

What kind of mistake is characterized by a situation where one party is mistaken as to the identity of the other party, induced by fraudulent misrepresentation?

Unilateral mistake

In the case of Raffle v. Wichelhause, what was the main reason the contract was deemed void due to mutual mistake?

Two ships with the same name at Bombay port

How is unilateral mistake different from mutual mistake in contract law?

Unilateral mistake involves fraudulent misrepresentation.

What does a party need to establish to prove a contract is void for unilateral mistake caused by fraudulent misrepresentation?

That they dealt with someone other than who they intended to deal with, and that person was aware of it.

Why did the buyer refuse to take delivery of the cotton in the Raffle v. Wichelhause case?

The buyer intended to receive cotton from a different ship.

In what circumstance does unilateral mistake in contract law often lead to a dispute?

When the mistaken party takes goods without knowing the fraud.

What factor contributes to making a contract void for unilateral mistake?

The fraudulent intent of one party.

What does a party need to prove in a unilateral mistake dispute regarding fraudulent misrepresentation?

Dealing with someone other than who they intended, and that person's awareness of this fact.

What is crucial in proving a contract void for unilateral mistake resulting from fraudulent misrepresentation?

You must prove you dealt with a different person than you intended and that person was aware of it.

What distinguishes bilateral mistake from unilateral mistake in contract law?

Bilateral mistake occurs when both parties are mistaken about each other's identity.

Study Notes

Loss of Financial Nature

Kirimu Estate (UG) Ltd. v. K.G. Korde: plaintiff company sued defendant lawyer for negligent misrepresentation, resulting in a loss of financial nature due to overvaluation of land.

Types of Mistakes

Two types of mistakes: mistake of law and mistake of fact
Mistake of law: does not affect a contract, except for mistake of foreign law
Mistake of fact: affects contractual relationships, an erroneous assumption or misapprehension of a fact or factual situation

Operative Mistakes

Common mistake: both parties make the same mistake about the existence or ownership of the subject matter
Common mistake renders a contract void in two circumstances:
- Cases of Res Exinta: subject matter does not exist (e.g., Couturier V. Hastle, Lessie Anderson V. Vallabdos Khalidas Company)
- Cases of Res Sua: parties are mistaken about the ownership of the subject matter (e.g., Bingham V. Bingham)

Mutual Mistake

A mistake about the subject matter of the contract
Arises when parties misunderstand each other or are at cross-purposes, resulting in a lack of consensus ad idem
Example: Raffle V. Wichelhause, where parties misunderstood the identity of the ship carrying the cotton

Unilateral Mistake

A mistake about the identity of one of the parties to the contract
Only one party is mistaken, and the mistake is induced by the other party
Arises when a fraudulent person misrepresents their identity to obtain goods or favorable terms
Original owner is entitled to the goods or their value by establishing that the contract was void for unilateral mistake