AuthorJohn D. McCamus
A party who has entered into an agreement labouring under a mistake
of some kind may wish to seek red ress in either one of two different
forms. First, the part y may wish to rely upon the mistake a s an excuse
for non-performance of his or her obligations under the agreement.
Alternatively, such a party may wi sh to seek a revision of the agree-
ment that will bri ng the agreement into alignment with his or her own
mistaken perception of the nature of the obligations imposed by the
agreement. In this chapter, we examine the possibilities for relief of
these two different kinds.
Different kinds of mist akes may affect a party’s decision to enter
into an agreement. One might be mistaken about the meaning of the
terms of the agreement. One might enter into an agreement motivated
by a reason that rest s on false information or assumptions. One might
sign a written agreement that does not ref‌lect one’s understanding of
the agreement reached through the negotiation process. The nature
of the relief available for mistake var ies from one type of mistake to
another and, accordingly, a threshold question to be addressed in a ny
examination of the law of contractual mistake is to fa shion appropri-
ate categories of the kinds of mist akes that may affect a transaction.
Although various terms are used by different writers to refer to the
various categories of mist ake, there is a broad consensus that there
exists a basic division between mistake s that prevent formation of the
Mistake 577
agreement, here referred to as “misunderstandings,” and mistakes con-
cerning some matter relevant to the deci sion to enter the agreement,
here referred to as “mista ken assumptions.”1 In some contexts, the two
categories are referred to, respectively, as mistakes as to “terms” and
mistakes as to “motive.2 In cases of misunderst anding, the parties
have failed to reach an adequate conse nsus ad idem.3 The partie s may,
for example, have different ideas about what the terms of the contract
mean. There is, one might say, no genuine or true agreement between
the parties. In a mistaken assumptions ca se, on the other hand, the
parties have reached a n adequate consensus ad idem.4 They share an
understanding of what the contract me ans but either one or both of the
parties may h ave entered into the agreement on the basis of a factual
assumption that proves to be fal se. A mistaken assumption relates to
the reasons for entering into t he agreement rather than one’s awareness
of the actual terms of t he agreement. Whether the mistake is a mi sun-
derstanding wit h respect to the terms of the agreement or a mistaken
assumption relating to the motives or reasons for entering the agree-
ment, the effect of the mistake m ay be to make the transact ion sur-
prisingly unattractive for one of the parties, once the truth is revealed.
The party who has been disadvantaged by the mistake w ill wish to be
excused from the agreement. As we shall see, a variety of doctrine s
developed, both at common law and in equity, that may achieve this
result in an appropriate case. We will also see that there is some as yet
unresolved tension in the interact ion between doctrines of common
law and equity in some aspect s of the law of mistake.
A third ty pe of mistake, here referred to as a “mist ake in integra-
tion,” occurs when the agreement as negotiated by the partie s is incor-
rectly recorded in what is intended by the par ties to be an accurate
written record of the agreement. Thus, in a contract for the purcha se
and sale of land, the descr iption of the land in the written agreement
1 For an illumin ating discussion of cla ssif‌ication questions, s ee G Palmer, Mistake
and Unjust Enrichme nt (Columbus: Ohio State Un iversity Press, 1962) ch 1 [Palmer].
2 See, for example, Calgary v Nort hern Construction Co, [1986] 2 WWR 426 (Alta
CA), aff’d [1987] 2 SCR 757, [1988] 2 WWR 193 [Northern Constr uction].
3 See generally Ch apter 2.
4 Thus, yet another set of categor ies that expresse s the distinction betwe en
misunderst andings and mista ken assumptions divide s mistakes into tho se
that “negative” consent in t he sense of demonstrating t hat genuine consent did
not occur (here refer red to as “misundersta ndings”) and those that operate so
as to “nullif y” consent in the sense of prov iding a basis for relief even t hough
consent was in itially secured (here re ferred to as “mistaken a ssumption”). See
Bell v Lever Brothers Ltd (sub nom Lever B rothers Ltd v Bell), [1931] 1 KB 557
(CA), rev’d [1932] AC 161 at 217 (HL) [Lever Brothers].
may describe a parcel that is larger or smaller than the parcel the par-
ties intended to tran sfer. The party who has been disadvantaged by
the mistake is l ikely to wish either to withdraw from the agreement
or have the written document revised so as to accord with the initi al
understanding of the parties. Courts of equity developed the remedy of
rectif‌ication to provide the latter form of relief. In a clea r case where the
parties reached a pr ior agreement that is not accurately recorded in the
written version of the agreement, such relief w ill normally be available.
The more diff‌icult question is whether such relief should be available in
other circumstances.
In this chapter, then, we consider the various doctrines developed
by the courts of common law and the court s of equity to provide relief
of various kinds from agreements affected by misunderstand ings, mis-
taken assumptions a nd mistakes in integrat ion.5 In what follows, the
term “unil atera l mistake” is used to refer to situations in which only
one of the parties to the agreement labours under a mistake. Thus, a
unilateral mistake with respect to the mea ning of a term would occur
where one party suffers from such a mi stake but the other party to
the agreement is aware of the correct meaning of the term. The term
common mistake” will be used to refer to situations where both parties
to the agreement share the same mistake. Thus, a common mistaken
assumption occurs where both parties suffer from the same incorrect
assumption concerning some factu al circumstance that i s material to
the decision of one or both of the parties to enter into t he agreement.
1) Introduction
A misunderstanding occurs where one party is not clear about the
correct meaning of a term or ter ms of the agreement or where both
parties understand the meaning of a term or terms differently, neither
understanding being, in the requisite sense, the correct meaning of
5 Mistakes m ay also arise in the conte xt of the performance of an ag reement.
Thus, for example, one might p ay a debt for a second time, having forgotten
that the debt had a lready been paid. In the nor mal case, such a second pay ment
should be and is recover able in a restitutionary c laim for the recovery of the
money paid under a mi stake. See generally PD Madd augh & JD McCamus, The
Law of Restitut ion, 2d ed (Aurora: Canada Law B ook, 2004) ch 10. The problem
of mistaken ove rperformance and the re stitutionary relie f therefor does not
raise is sues concerning the enforce ability of contractual obli gations and will
not be further con sidered here.

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