E-SEMINAR CASE SUMMARIES - MISTAKE AND MISTAKED IDENTITY Bell v Lever Bros Ltd (1932) Facts: - Mr. Bell was the managing director of a company for 5 years. This company was owned by Lever Bros Ltd. - During his employment, Mr. Bell made personal profit, which went against his contract with Lever. - Without knowing this, Lever Bros Ltd. offered Mr. Bell a redundancy which would terminate his contract with them while offering him a compensatory payment of £30,000. Issues: - Whether the redundancy contract that was created and accepted by Mr Bell, could be void by common mistake, due to later finding out about his personal trading. - Lever Bros Ltd argued that this concealment and misconduct was a breach of his duty that was detailed in his employment contract. Outcome: - The court held that the contract was not void, as the mistake was not an 'essential and integral' part of the contract. The personal trading that had happened during the employment was not related to the subject matter of the contract and was said to be minor compared to the profits Mr Bell had made for Lever Bros Ltd. - Only a mistake to the identity of the parties or of subject matter to the contract, as well as an item's quality, would be able to successfully negate consent and therefore void a contract, as if it had never existed. The mistake must be essential to the identity of the contract. Great Peace Shipping Ltd v Tsavliris Salvage International) Ltd [2003] Facts: - The defendants, Tsavliris Salvage International Ltd, were a company that offered salvaging facilities to ships in the South Indian Ocean that needed assistance. - A ship called the Cape Providence required help after it had endured structural damage at sea. The defendants looked for any merchant vessels that were nearby to assist them. The complainants, Great Peace Shipping Ltd, said they were the closest to the ship, being around 30 miles away. On this information, the defendants commissioned the complainants to help the ship. - This was a mistake and the complainants were around 400 miles away from the ship. Since the Cape Providence was in desperate need of help, as it was sinking, the defendants cancelled the contract with the complainants and asked another ship for assistance.
Issues: - The claimant had sued for their contract fee with the defendants. - The defendants argued that the distance from the Cape Providence was a common mistake and this would invalidate the contract that they had for providing assistance. - The issue in this case was whether this was a common mistake and if it could void the contract. Held: - It was held that this was not a common mistake that would void the contract between the complainant and defendant. It was a matter of quality of the performance of the contract. - The miles did not matter, and it did not make the contract impossible to perform. - A common mistake requires an