Commercial Law; An Elementary Text-Book for Commercial Classes (Paperback)

Purchase of this book includes free trial access to www.million-books.com where you can read more than a million books for free. This is an OCR edition with typos. Excerpt from book: CHAPTER VI EFFECTS OF MISTAKE, MISREPRESENTATION, OR FRAUD 88. Reality of Consent.?A contract which on the face of it is for a legal and possible object, possesses the proper form or consideration, and is made between parties capable of contracting, may, however, have no legal effect or a limited legal effect if it appear that there was no real agreement. This may happen in three ways: (i) where there was a " mistake," the parties meaning different things; (2) where there was "misrepresentation," by one of the parties that induced the other to contract; and (3) where there was " fraud," i.e. an intentional misrepresentation. 89. Mistake.?As a general rule one party to a contract is not allowed to avoid it by alleging that he made a " mistake." The word "mistake" may, however, be used in various senses. It may mean a mistake as to expectations. A. buys goods thinking the market is going to rise, when in fact it falls. It may mean a mistake as to the utility of the article for a particular purpose, as, for instance, where a person buys a stove which he finds too small for heating purposes. Or it may mean mistake in wording the offer or the acceptance, e.g. where A. orders I 00 tons when he only meant 10 tons. Other uses of the word might easily be given. We are, however, concerned with a technical use of the term to denote certain circumstances that are recognised by the courts as indicating a want of that real consent that is essential to every contract. These circumstances may be divided into five classes: ? 1. Where the contract relates to a thing believed by both parties to exist when it has ceased to exist. 2. Where one party contracts with another person believing him to be a third party. 3. Where one party, not being negligent, is mistaken as to ...