Having discovered this fact, the defendant refused to deliver. A majority of the court held that the parties had contracted on the understanding that that the cow was incapable of breeding. Accordingly, there had been a mistake not merely as to quality, but as to the very nature of the thing sold. It was thought that there was as much difference between an ox and a cow as there was between the animal the plaintiff bought and the one which both parties believed to be the subject matter of the contract. The difficulty with Sherwood v Walker when compared with the reasoning employed in Bell v Lever Bros is that the former looks suspiciously like a case in which the court has rectified what amounts to little more than a bad bargain. One way of viewing the difference between Sherwood and Bell is that the cases reveal a policy conflict in the way different judges approach the issue of risk allocation. On the one hand, there is a market-individualist approach to cases of mistake which seeks to uphold the sanctity of contracts and will therefore result in only the smallest number of cases in which the courts will upset a bargain on the ground of a shared mistake. On the other hand, there are cases in which the courts are more prepared to consider notions of fairness and justice in determining whether a mistake invalidates an agreement. It is not surprising that this alternative approach has developed in equity rather than at common law, as a simple glance at the form of relief granted in each case reveals a substantial difference. The common law answer in cases of shared fundamental mistake is that the contract is void ab initio – the contract is treated as if it never existed. In contrast, the equitable solution is to order rescission of the contract, but on terms that attempt to do justice between the parties. Thus, it is possible in equity to order rescission of the contract but then to add a rider to the effect that there should be a renegotiation of the contract on terms which take account of the fact in respect of which the parties were mistaken. In Solle v Butcher, the defendant leased to the plaintiff a flat. Both parties believed that the relevant property was not covered by the provisions of the Rent Restriction Acts, with the result that the defendant could charge a rent of £250 per annum. However, it later transpired that the relevant legislation was applicable with the result that the maximum rent payable was only £140. Such a mistake would not have been operative at common law, but the court held that the contract was voidable in equity, provided there was a fundamental mistake and no fault on the part of the person seeking relief: Solle v Butcher [1950] 1 KB 671, CA, p 690
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1939 ◽
Vol 170
(941)
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pp. 266-271
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1953 ◽
Vol 11
(3)
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pp. 377-394
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2021 ◽
Vol 13
(2)
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pp. 88-108
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2002 ◽
Vol 61
(1)
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pp. 87-125
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