INTRODUCTION

The online law dictionary defines Mistake is an incorrect or wrong action or belief ,an act
or omission caused by ignorance or misconception about the true situation.1

According to Wikipedia In contract law, a mistake is an erroneous belief, at contracting,

that certain facts are true. It can be argued as a defense, and if raised successfully can lead
to the agreement in question being found void ab initio or voidable, or alternatively an
equitable remedy may be provided by the courts2.

The law of contract Act under section 20 (1),(2) Cap345 R.E 20023 explains that an
agreement will be deemed to have been void if the parties themselves in the contract are
under mistake of actual essential fact on which they are contracting for.

In such circumstancesa contract is said to be contracted by mistake where parties are

misunderstanding to each other in other eventsa contract maybe mistakenly concluded
where there is a misunderstanding between the parties to the contract.

Misunderstanding may be made by one party or both parties to the contract. In order for the
court to conclude that the contract has mistaken or concluded under the presence of
mistake, the mistake in question must be the mistake to fact and not law. Mistake of law is
not recognized because a defence that “ignorantia juris non excusat” which means
ignorance of law has no excuse will apply.

In this sense therefore the mistake may result into different forms be it a mistake of fact
and mistake of law.

Mistake of fact occurs when a person believes that a certain event exists while it does not.
Also such mistakes are usually known to be those of misapprehension of the fact or factual
situation, such mistake when exist makes or render the contract void. Mistake of fact at
common law when operative makes the contract void abi initio to mean void from the
beginning.

Mistake of law: when a party enters into a contract, without the knowledge of the law in
the country, the contract is affected by such mistakes but it is not void. The reason here is

1Online legal dictionary.com

2www.wikipedia.com

3Law of contract Act Cap 345 RE 2002

that ignorance of law is not an excuse. However, if a party is induced to enter into a
contract by the mistake of law then such a contract is not valid.
This is situated in the case of In Brennan v Bolt Burdan4. The facts of the case were that
Miss Brennan, a local authority tenant, sought damages for personal injury sustained by
breathing in carbon monoxide fumes from a faulty boiler. She entered into a compromise
agreement in the belief that she had brought her action out of time and withdrew her claim.
Subsequent to this a legal precedent was overruled by the Court of Appeal and Miss
Brennan argued that the compromise agreement was void for mistake in that the parties had
been mistaken as regards her action being out of time.

The Court of Appeal held it was held by the that a mistake of law could render a contract
void that a change in the law was a risk that all parties had to accept and that in any event
this was not a true mistake of law at all but more a state of doubt. It was considered that the
compromise agreement which was possible to perform was a matter of give and take which
should not be lightly set aside. The case, however, indicates that the courts have now
accepted that mistakes of law can render a contract void.

There are several types of mistakes both under common law and in Tanzania (Under the
LCA) as follows;

UNILATERAL MISTAKE
A unilateral mistake is where only one party to a contract is mistaken as to the terms or
subject-matter contained in a contract. This type of mistake arises out of the classical
analysis of contract in that where by one party contracts on the basis of the mistake to the
nature of the promise made by the other party, and the other party is aware of the mistake
thus the contract is said to be void since there are no conjoining link between the offer and
acceptance of the parties concerned.
Under section 22 of the law of contract Act Cap 345 R.E 20025 elaborates that a contract
is not actually voidable merely because it was caused by one of the parties under a mistake
as to the matter of fact.

4(2004) EWCA Civ 1017

5Law of contract Act Cap 345 R.E 2002
However it should be noted that in order for this type of mistake to operate there should be
a fundamental mistake as to the nature of the promise made by the other party and it should
be.
The unilateral mistake basically is categorized in to two forms which are mistake as to the
terms of the contract and mistake as tom the identity. For example in a case of Cindy v
Lindsay6, the rogue here was a man called Blenkern. He sent an offer to buy something
from cundy which was accepted. The name that appeared in the offer was Blenkiron and
Co..37 wood street. There existed in the same street a famous company known as Blenkron
and Co. Blenkron received the goods and quickly sold them to Lindasay. Having
discovered the trick Cundy sued Lindasay for the recovery of goods. He argued that he
made a mistake to identity of the person with whom they were dealing.
It was held that since the plaintiffs never new Blenkern before they never intended to deal
with him and between them there was no contract since there was no consensus ad idem
(meeting of the mind)

COMMON MISTAKE
A common mistake happens when both parties to an agreement make the same error with
regard to the matter of fact that is essential to the agreement
.Common mistake simply means a mistake committed by both parties to the contract 7. This
arises where both parties to the contract are under mistake which is essential to the
agreement and that mistake must be mistake of fact and not law as per section 20(1) of the
Law of Contract Act Cap 345 R.E 2002 reads as follows
“…Where both the parties to an agreement are under a mistake as to a matter of fact
essential to the agreement, the agreement is void…”
It is important to note that both parties must commit the same mistake but if the parties
commit different mistakes then it cannot be called common mistakes.
Common mistake may appear in different forms where both parties are under mistake as
follows;
 A common mistake as to the existence of the subject matter (Res extincta)
Where both parties contract in the mistaken belief that a particular thing is in existence
when in fact it has ceased to exist there is a fundamental mistake which renders the contract

6(1878) 3 App case 459

7 Phang’common mistake in English law,
void. Under this mistake both parties in the contract do appear to believe towards the
existence of the certain good or product for contracting while in real sense there is no such
existence of such product or good. For example in the case of GALLOWAY V.
GALLOWAY (1914) In this case the parties, believing they were married, entered into a
separation agreement. Later, they discovered that they were not validly married. It was held
that separation agreement was void for a common mistake. The same circumstances were
seen in the case of COUTURLER V. HASTLE8 The case concerned a contract to sale a
cargo of maize which did not at the time of this contract exist, parties enetered into the
contract for sale of maize, both the parties new the maize was on a ship from a place called
solaninka to England where they were in fact before they so made the agreement the maize
had began to deteriorate and so it had been unloaded and sold at Tunis.
The issue was whether the seller was entitled to recover the purchase price of the maize
from the buyer as agreed in the contract. The Court held that Since both parties had
contemplated the existence of the subject matter to be sold and bought respectively, Thus
the seller had nothing to sell and the buyer had nothing to buy. Hence the contract was held
to be void
In addition section 8 of the sales and goods Act R.E 20029provides that were there is a
contract of the sale of specific goods, and the goods without the knowledge of the seller
have perished at the time when the contract is made, the contract is therefore void.
 A common mistake where there is a mistake as to the title of the subject matter
(Res sua)
That is, the thing sold already belongs to the buyer. This arises where both parties are at
mistake as to the title of subject matter. It arise especially where parties agree to purchase
the property the property which is unknown to the seller and buyer.
Basically in In Tanzania the effect of common mistake is that when it is actually evident
that there has been a common mistake between the parties to contract Section 20 of the
law of contract10 provides that in any circumstances whereby there will be a mistake
between the parties over a subject matter the contract shall be deemed to be void. It is of
the same concern on section 65 of the law of contract Act11 requires the party who

8(1856) 5Hl cas 673

9Cap 214 RE 2002
10ibid

11ibid
actually gained an advantage of the void contract to restore that advantage or to
compensate the innocent party for it.

MUTUAL MISTAKE
Mutual mistake simply means misunderstandings between the parties to the contract.
Mutual mistake is where both parties are under mistakes and it happens whereby one party
to the contract fails to understand the intention of other party to the contract. Parties are
said to consent when they agree upon the same thing in the same sense i.e. consensus ad
idem meaning meeting of the minds as provided for under section 13 of the Law Of
Contract reads as follows;
“…Two or more persons are said to consent when they agree upon the same thing
in the same sense…”
When two persons do not agree to same thing in the same sense they are therefore said to
be at cross purposes and this is what is referred to as a mutual mistake. Therefore a mutual
mistake occurs when the parties to a contract are both mistaken about the
same material fact within their contract.
Basically the parties are said to be at cross purposes when, were the parties fail to
understand each other’s intention and are at cross purposes, the court will apply an
objective test and consider to whether a reasonable man would take the agreement to mean
what one party understood it to mean or what the other party understood it to mean.

Mutual mistake may take different forms as follows;

Mistake as to the quality of the subject matter may take from of other types of mistakes
such as unilateral and common mistake.
The general rule is that mistake as to the quality of the subject matter doesn’t render the
contract void but voidable contract. But if there is a fraud which is committed then the
contract become void. The exception to the general rule is that where such a mistake as to
the quality of subject matter is fundamental fact in the contract and each party knew about
such a fact then the contract become void.
Mistake as to the contents of the subject matter.
This may found in other types of mistakes but mistake as to the subject matter may render
the contract void.
Consider the case of RAFFLES V WICHELHAUS12In Raffles, there was an agreement
to ship goods on a vessel named Peerless, but each party was referring to a different vessel.
Therefore, each party had a different understanding that they did not communicate about
when the goods would be shipped.
In this case, both parties believed there was a "meeting of the minds," but discovered that
they were each mistaken about the other party's different meaning. It was held that the
contract was void for the mutual mistake.
This represents not a mutual mistake but a failure of mutual assent. In this situation, no
contract has been formed, since mutual assent is required in the formation stage of contract.

DOCUMENT MISTAKENLY SIGNED

Mistake as to document had been developed through case laws. In Latin maxim it known as
non est factum means (it is not my deed). It is a defence where one of the parties who
have signed the document may raise a defence on the fact that the document is different
from what he had signed. This is an exception to the general rule that when a person signed
a document he bind himself as to the content of the document which he has signed.
Historically the defence was used by persons who were illiterate since they didn’t know
how to read and write. They argue that since they didn’t know to read and write then they
were called to sign the document which was against their favour. Later on in 19th C the
doctrine of plea of non est factum was extended to cover even the literate person whereby
a person may raise a defence that he sign a document which was totally different which
he/she has in his mind.
In such circumstances were a person has been induced to sign a contractual document by
fraud or misrepresentation, the transaction will be voidable.
For example as seen in the case of FOSTER V. MACKNONN13, A defendant, an old man
of feeble sight was induced to endorse a bill of exchange for E 3000 on the assurance that it
was a guarantee. The old man had actually been only shown the back of it, The bill was
endorsed for value for the plaintiff, Foster who sued the defendant on the bill.
It was held that Defendant’s plea of non est factum was good and he was not liable on the
bill Since the plaintiff used misrepresentation and fraud to mislead the defendant

12(1864) EWHC Exch J19

13[1869] LR 4 CP 704
Conditions for the successful plea of the doctrine of non est factum
i. The signer should not be careless in signing
ii. There should be a radical difference between the document which was signed and what
the signer thought he was signing.

GENERALLY, the word mistake as used in the law of contract it can actually be referred
differently in common normal speech. It is of no doubt that Mistake in contract act is
referred to an erroneous belief, at contracting, that certain facts are true. It is of same
circumstances that a misunderstanding of parties when making contractual relation. As per
the general rule that sometimes mistake can not stand as a defence specially in the mistake
of law and in same nature mistake can lead a contract void or voidable depending on the
circumstances raised in different cases.
BILBLIOGRAPHY
Atiyah, An Introduction to the Law of Contract, 6th edn (Oxford University Press, 2003)

Macmillan, ‘Rogues, Swindlers and Cheats: The Development of Mistake of Identity in

English Contract Law’ [2005] Cambridge Law Journal 711

McLauchlan, ‘Mistake of Identity and Contract Formata’ (2005) 21 JCL 1

2004_Black's-Law-Dictionary-Edition-8

STATUTES

The Law of Contract Act Cap 345 RE 2002

The Sale of Goods Act 1979,

ELECTRONIC SOURCES

www.Wikipedia.com

www.onlinelegal dictionary.com