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Laws Relating to Mistake and Misrepresentation in Contract Situation Essay

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Updated: May 10th, 2022

Summary

Contract laws in Ireland are deeply founded on the common customary bylaws. Until the Irish Nation was founded in fiscal 1922, the structured linkages amid the common bylaw of England and the legal system of Ireland appeared to be exceptionally strong. However, justice direction gyrated about identical court structures similar to those embraced in England, for instance, the Irish equity courts and the Irish common bylaw courts. With respect to the Irish contract situations, there are various laws that relate to misrepresentation and mistakes. These areas are discussed below:

Mistake laws

In Ireland, for contract validity to be affected by a mistake, the mistake itself should be an operative one. Such a mistake usually functions to render a legal and binding contract invalid (Friel, 2000). Thus, in contract situations, there are different types of mistake laws, which are subsequently discussed.

Common mistake

In the Republic of Ireland, a common mistake relates to a situation whereby both contracting parties make identical errors concerning an elementary actuality. There are three categories of a common mistakes:

Res sua

A contract is deemed invalid in Ireland in case the parties to the contract enter into the binding agreements of purchasing goods that are actually owned by them. This was the case in Phibbs vs. Cooper (1867) LR 2 HL 149.

Res extincta

A contract is deemed invalid at a common bylaw proviso the agreement theme under discussion is, in essence, unreal or imaginary. In case by the time the sales of goods contract are formed and the seller is not aware that the contractual goods are rotten, such a contract is considered invalid (Clark, 2008). Case examples of res extinct are Brymer vs. Griffith (1903) 19 TLR 434, and Hastie vs. Couturier (1856) 5 HL Cas 673.

Mistake relating to quality

In Ireland, a quality mistake in a binding contract is usually restricted to the contracted boundaries. As Lord Atkin stated in his ruling, if both the contracting parties make a mistake, then that mistake affects the consent (Clark & Clarke, 2008). A case example illustrating this is Lever Brothers Ltd vs. Bell [1931] UKHL 2.

Unilateral mistake

In Ireland, this is a contractual situation whereby just a single party to the binding contract becomes mistaken. The Irish case laws can be categorized as discussed below:

Mistake relating to the contractual terms

In the Hughes vs. Smith (1871) LR 6 QB 597 case, it was ruled that a simple judgmental fault concerning the eminence of the theme could hardly make a binding agreement invalid for the unilateral error. In Ireland, for an error to be deemed operative, a single party to the contract ought to make a mistake that is in line with the contractual terms (Friel, 2000). A contract will thus be void proviso one of the parties to the contract makes a mistake that they are aware of as well as being accountable for the contract nature.

Identity mistake

Under this bylaw, one of the contracting parties enters into an agreement with another party trusting that the person is a third contractual entity. The Irish bylaws make distinctions amid the contractual agreements whereby the contracting parties are inter pra esentes and inter absentes. These are well explicated in the Lindsay vs. Cundy (1878) 3 App Cas 459, and Brooks vs. Phillips [1919] 2 KB 243 cases.

Mutual mistake

In case both the contracting parties fall short of understanding one another, then a mutual mistake would emerge. This is the case where the contracting entities materialize to be at cross-purposes forcing the Irish courts to draw on the objective tests (McDermott, 2001). Case examples include Scarth vs. Wood (1858) 1 F&F 293 and Wichelhaus vs. Raffles (1864) 2 H&C 906.

Documentation mistake

In Ireland, the contracting parties are held liable when they sign the contractual documents since this indicates that they read and comprehended such binding documents. This was the case in Graucob vs. L’Estrange [1934] 2 KB 394. Nevertheless, if a party to the contract is compelled through misrepresentation or deception to sign the contractual papers, such a contract is deemed invalid (Clark & Clarke, 2008). Thus, the non-est-factum plea may occasionally be presented and where the plea succeeds, the contracting documents would be considered invalid.

Misrepresentation Law

In Ireland, any false statement of bylaw or details that persuade a contracting party to go into a binding agreement is dubbed as a misrepresentation. If a contract is misrepresented it may be considered voidable to an extent of being reserved by a representee. Generally, the available remedies for misrepresentation include damages and rescission. The bylaws, which relate to misrepresentation, are set up in the Irish common law (McDermott, 2001). They include fraudulent misrepresentation, innocent misrepresentation, and negligent misrepresentations.

Innocent misrepresentation

Under the Irish contract laws, this type of misrepresentation occurs in situations where the represents are able of demonstrating and offering sound grounds to prove that the statements are credible or true.

Fraudulent misrepresentation

In a case that involved Peek vs. Derry (1889) LR 14 App Cas 337, fraudulent misrepresentation was described by Lord Herschell as an account made of either; false truth that is known, a statement that lacks conviction in its precision, or a careless and reckless account that is uncertain of whether it is false or true (Byrne & Binchy, 2012).

Negligent misrepresentation

According to Clark’s (2008) assertions, it is clear that under the 1967 Irish misrepresentation Act, the neglectful misrepresentation corresponds to an account made devoid of the logical justifications for certainty in its precision. In fact, the represents are burdened to prove that the misrepresentation accounts are accurate. This is well illustrated in a case involving Ogden vs. Howard Marine (1978) QB 574.

References

Byrne, R & Binchy, W, 2012, Annual Review of Irish law, Round Hall Press, Dublin, Ireland.

Clark, R 2008, Contract law in Ireland, Round Hall Press, Northern Ireland.

Clark, R, & Clarke, B 2008, Contract cases and materials, Gill & MacMillan Publishers Ireland, Dublin, Ireland.

Friel, R 2000, The law of contract, Round Hall Press, Dublin, Northern Ireland.

McDermott, P 2001, Contract law, Butterworth/LexisNexis, London, UK.

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