Mathieson wanted to lease a suite in the new office building owned by Logan, which is the most prestigious one in town. He knew that Logan would not rent to him because of a business deal several years ago that had gone bad, costing Logan a great deal of money. Logan swore he would never do business with Mathieson again. Mathieson paid Muir to act as an agent for his company, and Logan rented to him. Several months later, Logan found out who had really rented the suite.

A) This is a unilateral mistake, which would entitle Logan to declare the lease contract to be at an end.
B) This is a mutual mistake, which would entitle either party to declare the contract to be at an end.
C) This is a unilateral mistake, but Logan cannot end the contract because the identity of the other party is not a material term of the contract.
D) Since the contract has been in existence without problems for several months, Logan cannot now withdraw his agreement to the contract as Mathieson has relied on it.
E) A contract based on a lie is void.

Question

Sydney Dally · Accepted Answer

Final Answer : A, Explanation :  CA unilateral mistake occurs when only one party is mistaken about a fundamental aspect of the contract. In this case, Logan was unaware of Mathieson's involvement due to Mathieson's deliberate action to conceal his identity through an agent. This can be grounds for Logan to potentially end the contract if the identity of the party was a significant factor in his decision to enter into the contract. However, option C also holds true because in many contractual situations, the identity of the parties may not be considered a material term unless specifically stipulated, meaning Logan might not be able to end the contract solely based on the mistaken identity, especially if the lease has been executed and adhered to without issue. This complexity reflects the nuanced nature of contract law, where the materiality of the mistake and the terms of the contract itself can influence the outcome.

Definitions

Learning Objectives

Learning Objectives

Related questions