Q&As

There are three parties to a contract (A, B, and C) with separate obligations. In the mistaken belief that A had a release from B, A and C exchanged contracts. However, B had not signed the contract or released A. C has obligations in the contract to take actions with B under B’s obligations in the contract. Given that one of the parties has not signed the contract, has there still be an effective exchange and are there consequently enforceable obligations between A and C or is the whole contract ineffective?

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Published on LexisPSL on 07/06/2018

The following Property Disputes Q&A provides comprehensive and up to date legal information covering:

  • There are three parties to a contract (A, B, and C) with separate obligations. In the mistaken belief that A had a release from B, A and C exchanged contracts. However, B had not signed the contract or released A. C has obligations in the contract to take actions with B under B’s obligations in the contract. Given that one of the parties has not signed the contract, has there still be an effective exchange and are there consequently enforceable obligations between A and C or is the whole contract ineffective?
  • Void contract
  • Voidable contract
  • Unenforceable contract

There are three parties to a contract (A, B, and C) with separate obligations. In the mistaken belief that A had a release from B, A and C exchanged contracts. However, B had not signed the contract or released A. C has obligations in the contract to take actions with B under B’s obligations in the contract. Given that one of the parties has not signed the contract, has there still be an effective exchange and are there consequently enforceable obligations between A and C or is the whole contract ineffective?

There are varying degrees of imperfect contract, ie void, voidable and unenforceable. See: Imperfect contracts: Halsbury's Laws of England [207].

Void contract

A mistake may arise as to the nature of the transaction, identity of the contracting parties, the quality of the subject matter or terms of the contract. For more information, see Practice Note: Mistake.

A contract will be void among other things where the parties contract on the basis of a fundamental common mistake or one party contracts on mistaken terms and the other party knows of the mistake. A void contract has no legal effect from the very beginning. For more information, see Practice Note: Void

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