Commentary

41 When mistake makes a transaction voidable

POWERS OF APPOINTMENT vol 33
| Commentary

41 When mistake makes a transaction voidable

| Commentary

41 When mistake makes a transaction voidable

The distinction drawn in Gibbon v Mitchell1 between effects and consequences had been much criticised and, the Supreme Court concluded, had left the law in a state of uncertainty. It was also ‘contrary to the general disinclination of equity to insist on rigid classifications expressed in abstract terms’2. Accordingly the Supreme Court determined that the correct test for mistake was that set out by Lindley LJ3: ie the gravity of the mistake has to be assessed in terms of injustice (‘unconscionableness’). This must be evaluated objectively4:

‘The gravity of the mistake must be assessed

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