May 12, 2010


While contracting parties can make some mistakes and if the contract doesn’t reflect the belief of the parties it is normal that a judge is allowed to look deeply in the agreement, the problem is that once the contract is formed other people may be involved in its effect. Those parties, in absolute good faith are not there to pay for errors made by contractors.

In English law to get a voided contract for a common mistake the mistake has to be sufficiently important (even though in equity it can be ordered to enter into a new contract), in a mutual mistake the contract is not voided, nor it is when a party alone has made it.(unless fraud , or mistake on an essential element of the contract). Indeed a strictly commercial approach of the subject, very dear to the Anglo-Saxon systems, suggest that in sale it is clear than a seller for instance, will try to mistaken the buyer to get a transaction.

German law, in its 119 BGB is very clear, and like English or French law the provision, even if it looks Statutory, and leaving no room for interpretation, gives the judge the right to appreciate if without the mistake the person who made a mistake would have reached the same decision. Of course like English law the value of an element cannot be considered as essential. (Otherwise, for the same reasons as above, business would be absolutely pointless.)

French Contract law is based on the agreement of the will in a quasi-sacred way, the 119 BGB is covered in article1116 of the Code Civil view here as “dol” if not article 1110 expressing an error on the “substance” this substantial quality aspect is so important and wide that... in 2008 a judge voided a wedding on those grounds because a wife lied to her husband about her virginity (essential for him to contract. Even if here the problematic article is 180 of the Code civil the grounds were the same and the legislator and even the executive powers had to show all their creativity to force the judges to limit this decision, and then to recreate statutes to prevent it from happening.

We have to acknowledge that Caveat emptor is considered a general rule in all systems.

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