Contract Law - Impossibility, frustration and mistake

What this page is about: Impossibility, frustration and mistake

The problems dealt with in the following paragraphs1 concern situations where the parties have reached agreement but the question arises whether the existence or non-existence of some fact, or the occurrence or non-occurrence of some event, destroys the basis upon which that agreement was reached so that the agreement is discharged or in some other way vitiated. That situation is sometimes described as 'mistake'. However, in utilising that description, the following distinction must be borne in mind: if mistake operates at all in contract, it operates so regarding negative or in some cases nullify consent2.

A mistake negatives consent where, on ordinary offer and acceptance principles, it prevents any agreement coming into in existence. This may be because of a mistake regarding the person with whom one is contracting3, or regarding the subject matter of the contract4, or regarding the terms of the contract5.

A mistake nullifies consent where the parties reach agreement, but that agreement may be nullified because that agreement was made under a fundamental mistaken assumption. In this circumstance, the effect of the mistake may differ according to whether the mistake renders the contract impossible to perform6 or not7.

These rules might be seen in terms of good faith dealings8.

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Also in this section:

888. Impossibility, frustration and mistake
889. Impossibility and frustration in general
890. Relative impossibility
891. Impossibility caused by a party to the contract
892. Intention of the parties: acceptance of the risk of impossibility
893. Alternative promises
894. Impossibility ab initio
895. Mistake of quality at common law
896. Mistake in equity
897. In general
898. Juristic basis
899. Fault of party: self-induced frustration
900. Ambit of doctrine of frustration: application to particular contracts
901. Leases and sales of land
902. Causes of frustration
903. Death or incapacity of party
904. Contract becoming onerous
905. Matters within scope of contemplation of parties
906. Force majeure clauses
907. What constitutes an act of God
908. Contracts made subject to licence
909. Introduction
910. Time of frustration
911. Frustration of part, or suspension, of a contractual obligation
912. Losses arising from frustration: effect at common law
913. Losses arising from frustration: effect by statute
914. Advance payments and sums accrued due before discharge
915. Payment for valuable benefit obtained
916. Severable provisions
917. Express provisions
918. Insurance moneys
919. Contracts to which the 1943 Act doesn't apply