General Principles of Law. The Law of Contract Essay

General Principles of Law. The Law of Contract - Essay Example In the contract law, mistakes are classified as non est factum, unilateral and bilateral. Non est factum relates to written contracts, where a party to the contract, claims that the contract document is not the document that it had signed. Mistakes constitute a very difficult and complicated area of the law of contract and relate to the time of formation of the contract. There are two types of mistakes, agreement mistakes take place when either the parties are at cross purposes or one party is mistaken and this is known to the other party. In Smith v. Hughes, 1871, the plaintiff sold oats to the defendant who believed, mistakenly, that these were old. The court upheld the defendant's decision not to accept these oats. The other type of mistake is the common mistake, in this both parties contract on the basis of a mutual mistake and the courts in certain circumstances set aside the contract. In Bell v. Lever Brothers, 1932, The Lever Bros Ltd appointed Bell as the managing director wi th the service condition that he could not make any secret profits. Bell breached this agreement and made secret profits; in the meanwhile, the company made Bell redundant and paid for the same. Later on the company came to know that Bell had made secret profits and proceeded legally to recover the redundancy payment. The Court of Appeal accepted the Company's plea but the House of Lords held that the company was not entitled to have this amount returned as the mistake was not sufficiently fundamental. Under common law mistakes are voidable contracts. Unilateral mistakes are those in which one party is mistaken and the other party is aware of this. Bilateral mistakes are those in which both parties are mistaken. The forms of bilateral mistakes are mutual, when both the parties to the contract are mistaken about different things. On the other hand bilateral mistakes are termed as common when both the parties are mistaken about the same thing. Mistakes as to the terms of a contract imply that the presence of a mistake in respect of the terms of a contract makes the contract void. The essential ingredients of such mistakes are that one party is mistaken and this is known to the other party. Such contracts are deemed to be void. In the case Webster V. Cecil, 1861, the defendant rejected an offer of 2000 and subsequently sent an offer letter to the plaintiff in which, he mistakenly offered to sell the property for 1250 instead of 2250. The plaintiff was aware of this mistake and when he tried to enforce the contract the court rejected his claim stating that the contract was void due to mistake of terms. Mistake as to identity are those in which a party to a contract impersonates another person in order to obtain goods or services, preferentially. There are two situations where the law recognizes the mistake as to identity. First, situations where the parties are face to face while making the contract and second, situations where the parties are not face to face and are at a distance while making the contract. In such situations the contract will be deemed to be void for mistake, if the plaintiff is able to establish that the other party's identity was vital to the contract and if the party can establish that it was dealing with a different party which actually exists.