Edited by Roger Halson and David Campbell
Chapter 13: Remedies for common mistake and frustration
As a general observation, most of the English law of contract is concerned with remedies rather than principles. This chapter, though, is concerned with two anomalous situations where there is a greater consideration of principles rather than remedies: mistake and frustration. In the case of each of these areas the law struggles to provide a remedy because there is an absence of any clear wrong by either contracting party. This chapter begins with an exploration of the extremely limited nature of remedial relief available for a common mistake. It is argued that the apparent absence of equitable relief in English law for a common mistake, following the Court of Appeal’s decision in Great Peace Shipping Ltd v Tsavliris Salvage (International) Ltd, has had an effect on the remedy of rescission. One aspect of this effect is to confuse the grounds upon which rectification should be granted. With regard to frustration the remedial consequences are only moderately better. At common law, the remedial or restitutionary consequences are universally recognised as unsatisfactory. The Law Reform (Frustrated Contracts) Act 1943 sought to address this unsatisfactory situation. It is argued, though, that the 1943 Act did not address all of the problems presented at common law. The 1943 Act is itself flawed in approaching the remedial consequences attendant upon a frustrating event by reference to the contract itself. These, rather surprising, legislative lacunae and the erroneous approach of the legislation mean that the Act fails adequately to remedy many instances where a contract is discharged through frustration. Parties, it is suggested, are well advised to attempt to provide their own remedial consequences in instances of frustration or mistake.
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