Mistake Relief

At common law, contracts affected by fundamental mistakes are void, and rescission occurs automatically, with restitution restoring the pre-contractual position. Equity offers broader and more flexible remedies, tailored to the injustice caused by a mistake. Equitable principles allow contracts to be voidable rather than automatically void, and relief may be granted on terms that seek fairness, including rescission, rectification, or refusal of enforcement.

A common mistake, where both parties share a false and fundamental assumption about a contract’s subject matter, can render it void. In equity, a less stringent standard applies, allowing relief where the mistake is significant and not caused by the claimant’s fault. The courts aim to avoid inequity, refusing to enforce agreements where a mistake undermines fair dealing.

Equitable rescission unwinds contracts but requires a court order and may be barred if it becomes impossible to restore the pre-contract position. Relief is discretionary and does not correct bad bargains or relieve parties of commercial risks.

Unilateral mistakes may warrant relief if one party exploits or deliberately conceals the other’s serious misunderstanding of a contract’s terms. Rectification can correct written agreements that fail to reflect prior verbal terms, but it requires clear proof.

Damages for mistake are limited, available only where there is a misrepresentation or breach of a contractual warranty. Equity’s flexibility ensures that justice is served, even when common law remedies are inadequate.

Read a detailed Article on this subject with the Legislation and Cases, browse Irish Legal Guide  or Contact Us for advice below.