(iii) Mutual Mistakes

A mutual mistake arises where there is a mistake in the communications between the parties to the contract so that no genuine contract is formed between them. This will be the case where there is no correspondence between the offer of one party and the acceptance of the other. So, for example, where one party offers to sell his car for ?5,000

and the other party agrees to purchase it for ?2,000, there is no genuine agreement between them because offer and acceptance do not correspond, so no contract is made.

(iv) The Doctrine of Non Est Factum

The essence of the Common Law doctrine of non est factum is that a written contract will be considered to be void where one of the signatories to it was misled into signing a document which was radically different from that which he or she intended to sign. This doctrine is interpreted restrictively, since it will only apply where the claimant who wishes to rely on it can be considered to have acted reasonably in signing the document.[1] The leading case on the operation of the doctrine is the decision of the House of Lords in Saunders v Anglia Building Society,262 where the claimant, an old woman, was induced to sign a deed which she thought assigned the lease of her house to her nephew, when in fact the deed assigned the lease to her nephew’s business associate. Since the claimant’s spectacles were broken she was unable to read the document but relied on the assignee’s representation that the deed involved a gift to the nephew. The claimant claimed that the deed was void, but the claim failed for two reasons. First, because there was no radical difference between what the claimant thought she was signing and what she actually signed.[2] This was because the claimant was not mistaken in thinking that the deed assigned the lease of her house; the mistake only related to the identity of the assignee. Secondly, since the claimant could have taken the trouble to find out what the effect of the document was, her failure to do so meant that she had acted unreasonably in signing the document and so her signature was valid. It would have been different if she were blind or illiterate since then she would have been compelled to rely on someone else to explain to her the effect of the deed. The consequence of this decision is that it is very difficult for the claimant to establish that a transaction is void by virtue of the non est factum doctrine.

  • [1] Avon Finance Co LtdvBridger [1985] 2 All ER 281. 5 [1971] AC 1004.
  • [2] substance of the whole consideration or to the root of the matter.
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