(v) The Consequences of a Contract Being Void for Mistake

Once the contract has been held to be void for mistake or by virtue of the non est factum doctrine, the claimant can secure restitution of any benefits transferred under it. This restitutionary claim may be founded either on the vindication of property rights, if the mistake was so fundamental that title to property did not pass to the defendant,[1] or on the reversal of the defendant’s unjust enrichment. As regards the latter principle, it follows from the fact that the contract has been vitiated for mistake that any benefit which has been received by the defendant from the claimant pursuant to the transaction will have been received in circumstances of injustice, since there will be no legally effective basis for the receipt. Where, for example, the claimant has paid the defendant under a contract believing that he or she was obliged to do so, and this contract is avoided by reason of a common or unilateral mistake, it is possible to show that the defendant was enriched at the claimant’s expense and the ground for restitution is usually the mistake. For if the claimant’s mistake was sufficient to vitiate the contract it must follow that the claimant’s mistaken belief in the validity of the contract was the operating cause of the claimant’s payment to the defendant.[2]

  • [1] See p 574, below.
  • [2] Alternatively the claimant may rely on the ground of total failure ofbasis, see Strickland v Turner (1852)7 Ex 208, 155 ER 919, or absence ofbasis, see Chapter 13.
< Prev   CONTENTS   Source   Next >