Write 8 page essay on the topic Mistake On Contract Law.
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As a landmark decision, Great Peace has been observed by various other sources as the final arbiter of the confusion that arose out of the Solle case. The essay will cite various sources that share a common observation of the impact that Great Peace has on contractual law, particularly on the disposition of issues relating to mutual mistake. Before proceeding to establish a position relative to the statement under scrutiny, it is essential to first understand, in the proper context, the “mistake” being alluded to as the core of the case in point. When parties enter into a contract, it is with the understanding that both sides understood what they were contracting about. However, there are instances when an incorrect belief as to a matter relevant to that contract gives rise to a situation wherein one party was mistaken but the other was not. This is referred to as unilateral mistakes and generally will not void a contract in the absence of vitiation of consent through fraud or deliberate misrepresentation. Nevertheless, there are situations where the mistake is suffered by both contracting parties. In this situation, there are 2 types of mistakes recognized, common mistake and mutual mistake, although the two can sometimes be used interchangeably. Strictly speaking, there is the common mistake when both parties essentially make the same false and fundamental assumption of a fact. It is the opinion of some commentators that this does not necessarily render the contract void. However, if the common mistake relates to the existence of the subject matter of the contract such that it either does not exist or has ceased to exist without the knowledge of the parties, then the contract is void. Even under these circumstances, the contract will not be automatically voided if a) there was a warranty by one party, b) misrepresentation of the existence of the subject matter by one party, c) if one party assumed the risk of the existence of the subject matter and d) when there exists an overlap between the doctrine of mistake and the doctrine of implied terms.1 The mutual mistake happens when both parties misunderstand each other’s intentions and are at cross-purposes. Compared to common mistake, here the parties do not actually make the same mistake but are proceeding on different assumptions. Ordinarily, this mistake will void a contract because it negatives consent. However, it has been argued that if by the behaviour or conduct of one party the other party is led to believe that the former was agreeing to the terms proposed by the latter, then the mistake will not necessarily be a ground to void the contract despite their obvious disagreement as to the purposes for such contract. Applying the above considerations to the Great Peace case, there was a common mistake which related to the misapprehension by both parties of the close proximity of their respective ships to one another on the basis of the information that was relayed to them by a third party. Consequential to this erroneous information, both parties proceeded to perfect the contract to avail of the service of Great Peace for a minimum of 5 days to stand-post for assistance in case of any untoward incident that was then most likely to occur to the casualty ship Cape Providence.