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Thursday

Mistake itu apa ?

Kesalahan adalah pelajaran yang seharusnya membuat manusia menjadi lebih bijaksana.

Ketika kita melakukan kesalahan, jangan pernah terlalu hanyut memandang kebelakang memikirkan kesalahan itu. Ambil pelajaran darinya lalu majulah kedepan.

Kita tahu bahwa masa lalu tidak dapat kita ubah, tetapi bagaimana kita akan membentuk masa depan kita, kesempatan itu masih ada pada genggaman kita.

Think twice, act wise…

mistake is an erroneous belief, at contracting, that certain facts are true. It can be argued as a defence, and if raised successfully can lead to the agreement in question being found void ab initio or voidable, or alternatively an equitable remedy may be provided by the courts. Common law has identified three different types of mistake in contract: the 'unilateral mistake', the 'mutual mistake' and the 'common mistake'. It is important to note the distinction between the 'common mistake' and the 'mutual mistake'.

A unilateral mistake is where only one party to a contract is mistaken as to the terms or subject-matter contained in a contract. This kind of mistake is more common than other types of mistake. One must first distinguish between mechanical calculations and business error when looking at unilateral mistake. For mechanical calculations, a party may be able to set aside the contract on these grounds provided that the other party does not try to take advantage of the mistake, or 'snatch up' the offer (involving a bargain that one did not intend to make, betrayed by an error in arithmetic etc.). This will be seen by an objective standard, or if a reasonable person would be able to know that the mistake would not make sense to one of the parties. Unless one of the parties 'snatched up' the one-sided offer, courts will otherwise uphold the contract.

Conversely, when a party is guilty of an error in business judgment, there is no relief.

Leading British cases on unilateral mistake are Smith v Hughes[Case 1] and Hartog v Colin & Shields.[Case 2] There are situations, such as in the contracting and subcontracting contexts, where a subcontractor provides a bid that would not seem reasonable in the context of industry norms. Similar to Donovan v. RRL Corp.,[Case 3] if a person sees an advertisement and there is a mistake that a person reading the newspaper would believe to be a valid offer and there is sufficient reliance on the offer, then it is unlikely that a court will rescind the contract. In the case of Donovan, the error in the newspaper was not the fault of the car dealer. The mistake was made on the part of the newspaper company that printed the error. This would be more of an example of a mutual mistake. Both the buyer (Donovan) and seller (RRL Corp.) mistakenly believed that the advertisement was correct. As is discussed in the mutual mistake section on this page, most likely a court will excuse each of a duty to perform the contract. Mutual mistake theory will also discuss the factors that will determine the allocation of risk in the event of a mutual mistake. The test to determine the allocation of risk is as follows: A defendant should bear the risk of the mistake if: (i) the agreement allocated the risk to the defendant; (ii) the defendant was aware of having limited knowledge with respect to the facts to which the mistake related but treats his limited knowledge as sufficient; or (iii) the court finds that it is reasonable under the circumstances to allocate the risk to the defendant. Given the facts in Donovan, who is in the better position to bear the risk? The car dealer who provides the advertisement? Or the consumer? Many jurisdictions would claim that the car dealer has more knowledge in this regard than a consumer. A consumer, generally, will not be aware of errors in an advertisement nearly as often as a commercial seller of goods who is in the business of advertising their own products to the public at large.

As any area of law, any doctrine has its exceptions. In Speckel v. Perkins,[Case 4] there was a unilateral mistake by one of the parties. However, the mistake should have been apparent to a reasonable person in the position of the party who did not make the mistake. The court determined that the offer of US$50000 was, on its face, clearly a mistake. The correct amount, as both parties were aware, was for US$15000. The question raises, at what point will the unilateral mistake become so apparent that it leaves unilateral mistake theory and enters into mutual mistake doctrine?

It is also possible for a contract to be void if there was a mistake in the identity of the contracting party. In the leading English case of Lewis v Avery[Case 5] Lord Denning held that the contract can be avoided only if the plaintiff can show, that at the time of agreement, the plaintiff believed the other party's identity was of vital importance. A mere mistaken belief as to the credibility of the other party is not sufficient.

Shogun Finance Ltd v Hudson[Case 6] is now the leading UK case on mistake as to identity [2003] UKHL 62. In this case, the House of Lords stated there was a strong presumption the owner intends to contract with the person physically present before him and only in extreme cases would the presumption be rebutted.

A mutual mistake occurs when the parties to a contract are both mistaken about the same material fact within their contract. They are at cross-purposes. There is a meeting of the minds, but the parties are mistaken. Hence the contract is voidable. Collateral mistakes will not afford the right of rescission. A collateral mistake is one that 'does not go to the heart' of the contract. For a mutual mistake to be void, then the item the parties are mistaken about must be material (emphasis added). When there is a material mistake about a material aspect of the contract, the essential purpose of the contract, there is the question of the assumption of the risk. Who has the risk contractually? Who bears the risk by custom? Restatement (Second) Contracts Sec. 154 deals with this scenario.

This is easily confused with mutual assent cases such as Raffles v Wichelhaus.[Case 7]

In Raffles, there was an agreement to ship goods on a vessel named Peerless, but each party was referring to a different vessel. Therefore, each party had a different understanding that they did not communicate about when the goods would be shipped.

In this case, both parties believed there was a "meeting of the minds," but discovered that they were each mistaken about the other party's different meaning. This represents not a mutual mistake but a failure of mutual assent. In this situation, no contract has been formed, since mutual assent is required in the formation stage of contract.

A common mistake is where both parties hold the same mistaken belief of the facts.

The House of Lords case of Bell v Lever Brothers Ltd.[Case 8] established that common mistake can void a contract only if the mistake of the subject-matter was sufficiently fundamental to render its identity different from what was contracted, making the performance of the contract impossible.

Later in Solle v Butcher,[Case 9] Lord Denning added requirements for common mistake in equity, which loosened the requirements to show common mistake. However, since that time, the case has been heavily criticized in cases such as Great Peace Shipping Ltd v Tsavliris Salvage (International) Ltd.[Case 10]

Those categories of mistake in the United States exist as well, but it is often necessary to identify whether the error was a "decisional mistake," which is a mistake as a matter of law (faced with two known choices, making the wrong one), or an "ignorant mistake," unaware of the true state of affairs.

The difference is in the extent to which an innocent in the information chain, passing along or using or processing incorrect information, becomes liable. There is a principle that an entity or person cannot be made more liable merely by being in the information chain and passing along information taken in good faith in the belief that it was true, or at least without knowledge of the likelihood of falsity or inaccuracy.


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