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Great Peace Shipping Ltd v Tsavliris Salvage (International) Ltd [2002] Watch

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    Why has it been argued that it was a good decision and made the law on common mistake more compatible with the doctrine of frustration?


    This topic IS frustrating!!
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    Did an essay on this yday. Lemme try copy and paste some stuff..
    to say that the statements in the Great Peace made the doctrine of common mistake and frustration coherent can be seen when considering the criteria which were established for common mistake. “The following elements are to be present if common mistake is to avoid a contract: (i) There must be a common assumption as to the state of affairs; (ii) There must be no warranty by either party that the state of affairs exists; (iii) The non existence of the state of affairs must not be attributable to the fault of either party; (iv) The non existence of the state of affairs must render performance of the contract impossible; (v) The state of affairs must be the existence, or a vital attribute of the consideration to be provided or circumstances which must subsist if performance of the contractual adventure is to be possible.” Similarities to frustration can be found here in the sense that many of the criteria are identical. Frustration also renders a contract void where through no fault of the parties, the performance of the contract becomes impossible. However, a fundamental difference remains between the two in the sense that frustration happens post contractually, as opposed to common mistake, which is pre contractual.

    Frustration and common mistake can be seen as allied with one another in the sense that with these new criteria which were introduced, the application of both doctrines would garner similar results. However, this would be for different reasons. Where the contract could not be void under common mistake simply because of the fact that performance of the contract had not been rendered impossible, under frustration, the contract would continue to have effect on the grounds that a contract “is not lightly to be invoked to relieve contracting parties of the normal consequences of imprudent bargains.”
    The point; “(ii) there must be no warranty by either party that that state of affairs exists” also serves to make common mistake coherent with frustration. This is particularly the case where there is frustration in purpose, as was the case in Krell V. Henry. The facts of Krell v. Henry are as follows; the claimant put his flat up for rent for people who wanted to view the coronation procession of King Edward VIII. The contract made no reference to the event. The defendant paid a deposit for the flat, but refused to pay the remaining costs when it emerged that the procession was cancelled due to the illness of the King. It was held that the claimant was not entitled to the remaining balance because the cancellation went right to the purpose of the transaction, despite this not being written into the contract. This is compatible with the idea that where there is a matter which is fundamental to the contract, and renders it impossible to perform, under common mistake, it will be void.

    Hope it helps.. Tell me if there's anything majorly wrong there and DON'T use it word for word?
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    SO much help. Thank you. i handed my essay in on wednesday but this was great for reinforcing what i thought and now i can chill!
 
 
 
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