LAS TÉCNICAS FREINET

It was shown above how German law will provide a remedy not only in cases where the other party knew of the mistake but also in cases where the non-mistaken party should have known that the other party had made a mistake.602 _{The position in} English law is not quite as clear.603 _{The English courts will grant relief in cases in} which the offeror has made a mistake on the face of the document and the offeree

600_{BGH MDR 1979, 730 (Daktari Film Case) .}

601_{BGH NZM 2010, 788 (Thor Steinar Case) .}

602 _{This related to the compensation available to the non-mistaken party under § 122 BGB.}

174 knew of the mistake604 _{or possibly should have known of the mistake.}605 _However, in cases where the mistake is not in the document the courts have been unwilling to provide relief. In comparison to German law, the English courts have recourse to misrepresentation even if the non-mistaken party did not know that he was

misrepresenting.606

The court’s approach in cases where there has been no misrepresentation becomes clear when turning to the case of Tamplin v James607 _{where a brew house and the}

surrounding property were for sale at auction. The auction plans showed the property608 _{consisting of two plots of land. One of these plots which had previously} belonged to the property had been sold to the railway. The buyer approached the seller after the auction and went on to purchase the property. The buyer never checked the plans because he knew of the property from when he was a child, not knowing that parts of the property had already been sold and he was buying a much smaller portion. The contract referred to the title map, stating the plots that were to be sold and their size.609 _{The court held that ‘if a man will not take}

reasonable care to ascertain what he is buying, he must take the consequences’.610

604_{Hartog v Colin & Shields [1933] 3 All ER 566 (KB).}

605 _{See above Ch. 4.05.}

606 _{Via innocent misrepresentation.}

607_{Tamplin v James [1880] 15 Ch D 215 (CA).}

608 _{Even though it seems that the map was quite small (see ibid. at 221).}

609 _{It should be noted that the court conceded that a buyer may be unaware of the difference.}

between twenty and forty perches (ibid. at 219).

175 The court expressed concern about the floodgates opening once allowing claims where one party is mistaken611 _{and in doing so focused much of the attention on} the hardship to the non-mistaken party who had reasonably relied on the

statement.

In Webster v Cecil612 _{the seller had made a mistake in his calculations (it would}

seem though that these calculations had not been shown to the buyer) and added up the sum as being £ 1100 rather than £ 2100.613 _{However, the seller had}

previously rejected to sell the property at a price of £ 2000 and upon discovering the mistake had contacted the buyer immediately. It is safe to say that the buyer knew of the mistake. The court, in a short judgment, refused to order specific performance but that does not inhibit a claim at common law.614 _{Lord James (in}

Tamplin v James) in reference to Webster v Cecil states that it is ‘a case where a person snapped at an offer which he must have perfectly well-known to be made by mistake […]’615_{. This could therefore lead to the conclusion that in cases in which}

one of the parties had made a mistake as to the price (i.e. an error in calculation)

611 _{Ibid. at 221.}

612_{Webster v Cecil [1861] 30 Beav 62 (CC).}

613 _{Ibid at 63.}

614 _{The continued existence of the equitable jurisdiction to set aside contracts for unilateral mistakes}

doubtful (see Chitty on Contracts (Beale ed, Sweet & Maxwell, 2013) 5.0.79) (see though Huyton SA v

Distribuidora Internacional de Productos Agricolas SA [2003] 2 Lloyd's Rep 780 (CA)) the decision in

Great Peace Shipping Ltd v Tsavliris Salvage (International) Ltd [2002] EWCA Civ 1407 (CA). (See Yeo,

‘Great Peace: a distance disturbance (Case Comment)’ (2005) 121 Law Quarterly Review, 393).

176 the other party will not be able to rely on the offer for specific performance616 _if they knew that a mistake had been made. The consequence is therefore that specific performance will be refused if it causes hardship amounting to injustice to the defendant although the defendant may still be liable for damages at common law.617 _{This does not really change the approach to errors in calculations. In Smith v}

Hughes618_{where the buyer believed to be buying old oats when in fact he was}

buying new oats, the court held that there was no relief for the buyer because he was only mistaken as to the quality of the object which was not a term of the contract. It was therefore irrelevant whether the seller knew of the buyer’s mistake.

The approach taken in Smith v Hughes619 _{has been confirmed, in the calculation}

error context, in a more recent case of The Harriete N.620 _{The case concerned a}

contract of demurrage in which the seller had miscalculated the amount to be charged to the seller due to the fact that they had entered the wrong dates into the computer system. The buyers admitted that they were aware of the mistake621 _and did not inform the seller of the mistake. Whilst the court accepted that if there was a mistake as to the terms of the contract and the other party knew of the mistake,

616 _{Or the courts may be unwilling to specifically enforce the contract.}

617_{Chitty on Contracts (Beale ed, Sweet & Maxwell, 2013) at 5.077 – 5.078.}

618_{Smith v Hughes [1871] 6 LR 597 (QB).}

619 _Ibid.

620_{Statoil ASA v Louis Drefus Energy Services LP (The Harriette N) [2008] 2 Lloyd's Rep 685.}

177 the contract would be considered void, they also held that the seller’s date for completion (which was in fact wrong) did not form part of the agreement.622

In other words, had the calculation been part of the contract (in which case the mistake would have appeared on the face of the document and the other party would or should have known of it), then the contract can probably be avoided under English law. However, if the seller makes a mistake which is not on the face of the document the contract will remain valid, even if the other party knew of the mistake.

This is in stark contrast to the German cases in which relief will be provided for errors in calculation. Relief will be provided in all circumstances if the error was on the face of the document and there is no requirement under § 119 BGB that the other party knew or should have known of the error. In cases where the mistake was made off the document the court will look to whether the other party knew or should have known. If the party knew or should have known then the court will impose a duty of disclosure on the party to bring the error to the attention of the mistaken party.623 _{It was shown above that the German courts are protecting the} mistaken party in cases when the non-mistaken party should have noticed that there has been an error. The German courts are then willing to impose a duty on the non-mistaken party to confirm that no mistake has occurred.624

622 _{Ibid. at 87 – 96.}

623 _{See for example the above at Ch. 4.6.}

178 The question remaining is why the English courts have not followed the continental approach in cases in which the other party knew or should have known and the mistake was not on the face of the document. The court seems to provide some indications in the Harriette N, where it was held that ’the mistake was entirely the result of carelessness by Mr Rostrup[…]’.625_{It would therefore seem that rather}

than just protecting the reliance of the other party, which is unlikely in cases in which the non-mistaken party knew of the mistake, there also seems to be an element of punishment of the party making the mistake. At first glance the English approach may seem questionable when just taking into account the contracts between two parties but in cases in which there is a chain of contracts and where contracts have to be made with little time to spare (and therefore often opting for the cheapest option), it may be in the interest of commercial certainty not to require the non-mistaken party to have to enquire as to whether there may have been a mistake.

4.10 Conclusion

This chapter has shown that the theoretical development of mistake has influenced the German approach to mistake which in turn has influenced the perspective from which the courts analyse the cases. In other words the focus in the German cases is on the mistaken party but in the English cases, where there has been a mistake as to terms, the focus is on the non-mistaken party. The will theory in the narrow sense is then limited by reasonable reliance and this approach is reflected in both systems (in Germany through § 122 BGB and in England via the objective theory).

179 The autonomy of the individual not to have to enter into an agreement where he was mistaken as to the terms of the contract and the other party knew of the mistake is therefore a shared value. However, the fact that the courts in cases where § 119 BGB did not apply decided to fall back on the principle of culpa in contrahendo reveals, similar to the conclusion in chapter 3, that the understanding of the will theory has been expanded to a duty to look after the interests of the other and not doing so will lead to fraud. Not disclosing the mistake to the other party in the English cases is not seen as ‘fault’ in the German sense, except in cases where there is a special relationship (see Ch. 4.9).

A similar value was revealed in Ch. 4.6 and Ch. 4.7 where the courts seem to be protecting the parties against informational imbalance. However, it is quite clear that many of the calculation mistake cases cannot be explained on the principle alone (e.g. see the evaluation of Hein Koetz626 _{in relation to the Daktari Film}

Case627_{) and it is the German courts that were willing to use general norms (such as}

good faith) to achieve their perceived just result. Partly this was explained on the basis of gaps in the legislative provisions (see a.6 on§ 434 BGB).

It is not part of this thesis to answer the question whether this second form of background relationship contract exists but the fact that cases along those lines exist provides a basis for expanding the thesis of Chapter 3 where it was disclosed that there seems to be a different understanding of ‘fraud’ in the German and English system. The above was clear that the protection of the parties’ will is

626 _{Koetz and Schaefer, Judex oeconomicus (Mohr Siebeck 2003).}

180 paramount to a valid contract but that the reliance of the other, as part of the ‘Interessenjurisprudenz’,628 _{will be protected through § 122 BGB. In addition} though, there seems to be a social element namely that where the result would be unbearable or where there is a relationship of trust exists the courts will step in to ensure protection. The term social is of course rather broad and could firstly be seen in light of the individual parties, i.e. the need to help another clearly in need (see the argument alluded to in Chapter 2 of the unterlassene Hilfeleistung which creates a positive duty)629 _{but secondly it could also be seen in light of the wider} social aspect. In the first sense the meaning of social is directed at the individual and that assisting the individual is desirable as a society.

The second sense of social is the fact that society as a whole should be protected from contracts that create unbearable results or through the misuse of trust relationships. The last point is probably best explained in light of the

‘Rechtsmissbrauch’ cases, where the court holds that enforcing the legal right would be contrary to good faith and therefore a misuse of the law. It would seem that overall it is the protection of society against the misuse of rights in cases that lead to unbearable results630 _{which is the primary concern. The last point of} protection of society as a whole may not seem to fit comfortably at this point but

628 _{See Heck, ‘Gesetzesauslegung und Interessenjurisprudenz’ (1914) 112 Archiv fuer die civilistische}

Praxis, p. 1 ff; ‘Interessenjurisprudenz’ means that the judge is required to fill gaps in the law with

reference to the way in which previous cases gave way to the conflicting interests.

629 _{The influence of which was discussed in Ch. 2.02 as originating in the German constitution.}

181 Chapter 6 will reemphasise the validity of the argument in light of unfair standard terms. This social aspect is not entirely lost on the English courts and the chapter has shown that in certain defined circumstances, e.g. joint ventures, the court will apply a similar principle of fault/fraud to the German courts.