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Recission Notes

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Recission Revision

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Recission Grounds for recission Mistake
 Cooper v Phibbs (HL)
 The plaintiff entered into a contract to rent land from his nieces, which in reality
belonged to him.
 Later, believing the property to belong to himself, he sought an order for recission of the
 Held that, the parties concluded the agreement under a mutual mistake and
misapprehension as to their relative and respective rights and the plaintiff, though there
was no fraud, was entitled to have it set aside.
 Solle v Butcher
 A landlord restored a war damaged house which, prior to the war, had been let in flats
subject to the Rent Restrictions Acts.
 The landlord, having restored the flat, could have increased the rent if he served the
appropriate notices but chose not to do so after the tenant indicated to him that he
understood the house to be sufficiently altered to be removed from the remit of the Acts.
 The tenant later sued for the difference between the rent he had been charged and the
maximum rent under the Acts and won.
 Bucknill LJ (concurring)
■ The parties had addressed their mind to the material issue of the identity of the new
flat and their mistake (as to whether the alterations had destroyed the identity of the
earlier flat) was a mistake of fact, allowing the contract to be set aside.
 Denning LJ (concurring)
■ There are two kinds of mistake those that render the contract void (common law) or
those that render it voidable (equity) - in the latter case the court can set the contract
aside on such terms as it deems fit.
■ The correct interpretation of Bell is that where, objectively and regardless of
subjective intentions or beliefs, two parties appear to have contracted on the same
terms and the same subject matter, the court will not interfere unless it must be set
aside for breach of some condition (e.g. non­existence of subject matter) or for fraud
or on grounds of equity.
■ Where the parties are under a common and fundamental misapprehension, and the
party seeking to rely on it was not himself at fault, then the courts may set the
contract aside in equity - in this case there was such a fundamental mutual mistake
that the contract and equity should impose what terms are just.
 Jenkins LJ (dissenting)
■ The parties knew all the material facts ­ they had not made a mistake as to fact, but
rather a mistake as to the effect the facts with which they were acquainted had on
their legal relationship.
 Great Peace Shipping v Tsavliris Salvage (CA)
 The plaintiffs contracted with the defendants to provide salvage services, with both
parties believing that the plaintiffs' vessels was considerably closer to the salvage site
than it actually was.
 When the defendants discovered this they sought another vessels before terminating the
contract and, when sued by the plaintiffs, claimed that the contract was void for mistake.
 Held that, Solle v Butcher does not constitute a true equitable doctrine (i.e. discretionary
rules which follow the common law to ameliorate its harshness), rather it runs contrary
to the common law in Bell v Lever Bros.
 O'Neill v Ryan (No. 3) (SC)
 The defendants were being sued by the plaintiff on a number of separate grounds and

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