CUHK: ISSUES IN CONTRACT

Week 5 Tutorial
Reading
Cases: Bell v Lever Bros [1932] AC 161
The Great Peace [2002] EWCA Civ 1407

Articles: J C Smith, Contract---Mistake, frustration & Implied terms

(1994) 110 LQR 400
Catharine Macmillan, How temptation led to mistake: an
explanation of Bell v Lever Bros (2003) 119 LQR 625

Questions:
1. Macmillan states of Bell that it: “..is not principally about contractual
mistake at all”. In that case what DOES she believe the case is REALLY
about?
2. What was the mistake in Bell and why was it (eventually) accepted as
“common”? (note that Macmillan, like Lord Hoffmann, describes the
mistake as “mutual” but this is a matter only of terminology).
3. On what basis does Professor Smith argue that Bell can be viewed as
both a res sua case AND a res extincta one?
4. What view, at first instance, did the jury take in Bell as to:
a) Fraud?
b) Mistake?
5. What was the unanimous view of the Court of Appeal in Bell?
6. How would you summarise the ratio of The House of Lords decision in
Bell?
7. Does Professor Smith view Mcrae as involving:
a) An agreement void for mistake?;
b) An agreement based on an express promise that the vessel existed?;
c) An agreement based on an implied promise that the vessel existed?
8. What practical difference would it make to the outcome of the case if
the court adopted a) rather than b) or c)?
9. Can the Mcrae decision be reconciled with Sales of Goods legislation in
England and Hong Kong?
10. Why does Professor Smith argue that the contract of guarantee in
Associated Japanese Bank v CDN was never concluded?
11. Why was the mistake in Great Peace not fundamental enough to render
the agreement for 5-day hire void?
12. What view did the Court of Appeal in Great Peace take of “voidability in
equity” for common mistake?
13. Why have some academics found ironic the hope expressed in Great
Peace that Parliament might introduce a more flexible approach to the
effects of common mistake, as it did with frustration?
14. What judicial precedent issues are raised by the Great Peace decision?