Illustrate mistaken assumptions

Question

Illustrate mistaken assumptions?

Answer 1

Mistaken assumptions can be defined as mistakes concerning a matter relevant to the decision to enter into a contract. They relate to the motive to enter into a contract as well as to assumptions about events at the time of contract.

(i) Regarding the subsistence of the matter of a contract

When the subject matter of a agreement which does not exist, excluding both the parties deliberation it did when they made the contract the contract is void.

(ii) About the value of the subject matter: allocation of risk

When both parties find that the quality of the subject matter of a contract is substantially different from what they pondered, court will 1st decide who ought to bear the risk of loss or damage.

(iii) The challenge of achieving a fair result

Where one or both of the parties change their position or forego an opportunity because of a mistake in an agreement, court grants reinforcement where it can achieve results reasonably fair to both parties.