How to tell the difference between mistake and misrep

As the title says. Is it that mistake is always about contractual terms and misrep is about statements which are not terms?

Reply 1

jacketpotato

20

My memory of mistake is fuzzy but I don't think its right that mistake has to be about terms?

The most fundamental difference is one of degree. A misrep can be relatively light and still be actionable. Mistake (both mutual and unilateral - the two are very different, its important to distinguish and keep them separate) has to be fundamental to the nature of the contract. Of course there are other differences (misrepresentations have to be made by the other party, the other party doesn't need to be responsible for a mistaken assumption to found mistake) but I think degree is the most important one. Mistake is a much rarer remedy than misrepresentation and much harder to prove as a result of the difference in degree.

Reply 2

jjarvis

14

Original post by jacketpotato

My memory of mistake is fuzzy but I don't think its right that mistake has to be about terms?

The most fundamental difference is one of degree. A misrep can be relatively light and still be actionable. Mistake (both mutual and unilateral - the two are very different, its important to distinguish and keep them separate) has to be fundamental to the nature of the contract. Of course there are other differences (misrepresentations have to be made by the other party, the other party doesn't need to be responsible for a mistaken assumption to found mistake) but I think degree is the most important one. Mistake is a much rarer remedy than misrepresentation and much harder to prove as a result of the difference in degree.

The point about mistake being fundamental to a contract is crucial.

One thing I think is also worth bearing in mind is the difference in remedy. "Mistake" of identity cases usually involve a *fraudulent* misrepresentation. The remedy, however, is drastically different. Mistake voids a contract, so third party rights are irrelevant. This puts the claimant in a much better position. Misrep, however, merely makes a contract voidable. If a third party has gained rights in the subject matter of the contract, or would otherwise be detrimentally effected, the claimant is left trying to claim damages against a party which has probably disappeared (or is insolvent).

Mutual or common mistake--for example where the subject matter of a contract is destroyed or rendered substantially different after formation--is obviously very different from misrepresentation. Misrepresentation requires a representation (which can be a statement, or by conduct) of fact or law in reasonable reliance upon which the other party enters the contract. In cases of mistake, there must be a misapprehension which goes to the heart of the contract. Mistake is fundamental--misrepresentation can merely be material, though it must be *a* substantial factor in the decision to enter the contract.

Edit: Also, you mention a statement with regard to misrep. Misrepresentation can also be by conduct. I think the leading case (certainly an entertaining, recent one) is Spice Girls Ltd v Aprilia World Service, dealing with an actionable misrepresentation by conduct that the Spice Girls would stay together for the length of an advertising campaign. (On an unrelated note, I actually met one of the counsel from that case the other night, though I didn't realise it at the time.)

(edited 13 years ago)

Reply 3

lawGB

1

Hi, sorry I'm late to this thread...I wondered what are the circumstances if a party has offered to supply a particular type of product but it is destroyed and cannot easily be replaced but the product is only a minor part of the subject matter of the contract and is unlikely to have induced the contract as a whole. If it is a term that requires a specific product to be supplied by a specific date, can the term alone be rectified with rescinding the entire agreement?

How to tell the difference between mistake and misrep

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