Hartog v Colin & Shields [1939] 2 All ER 566

Key point

  • A contract is void if there is a unilateral mistake as to a term in the contract and the other party knows or ought to known of the mistake

Facts

  • D sold 30,000 Argentine hare skins to C, by mistake offering them at a price per pound instead of at a price per piece
  • When D refused to deliver the goods, C brought claim for breach of contract

Held (High Court)

  • C’s claim failed; the contract was void for unilateral mistake as to terms

Singleton J

  • C must have known that offer was mistaken because previous negotiations had proceeded on the usual basis in the trade that price was by per piece: p. 31B
  • C could not have reasonably thought that the offer contained D’s real intention: p. 31C

Commentary

  • A unilateral mistake as to terms occurs when a party to a contract is mistaken about a term, thinking that another term was included instead, a unilateral mistake that is not in relation to a term does not void a contract even when the other party knew or ought to have known about the mistake (Smith v Hughes)
  • Some have argued that this case shows that unilateral mistake as to terms is an exception to the objective theory of contract law as Singleton J looked at actual or subjective knowledge
  • However, the better understanding is that this case adheres to the objective theory as Singleton J went on to say that C could not have reasonably thought that the offer contained D’s real intention, meaning that D’s objective intention was to sell hare skins at price per piece and hence there was no contract