“No, it was a mistake” is something that I appear to be coming across rather a lot.
Of course, I am talking about that good old general defence where, in one particular case, it was evident that our member placed reliance on the vehicle information supplied to them. Unfortunately, when our member went to sell the car, they found there was an outstanding finance issue that they had not been informed about. It is always helpful to note that a mistake is a wrong belief held by one of the two parties before entering into a contractual agreement.
In our member’s current position, where a title of goods remains with a finance company, but the item has been sold under the belief that it was free from any encumbrances, then payment should be made by the vendor to remedy the contractual obligation.
It is useful to know that if an employee has made a mistake, it is not that employee who is deemed liable, but the company, because the employer is ultimately responsible for the actions the employee takes on behalf of the company.
So, what does a wronged party seek in such cases? The remedies often sought are in equity, so rectification, an order for specific performance, or rescission. It is essential to establish whether the mistake is a fundamental nature of the contract, whose words and conduct are relied upon, to move to your remedy. Often in equity, it would be about putting the wronged party back in the financial position that they should have been in had the mistake not arisen. It can also mean that the contract is voided or order that the parties carry out what they promised to do from the outset.
A cautionary tale to ensure that both parties understand what they are signing up for will save headaches down the line.
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