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Great Peace Shipping Ltd v Tsavliris Salvage (International) Ltd, [2002] 4 All ER 689

Facts:

Agreement to salvage boat. Both thought D was 35 miles away. P was actually 410 miles away from damaged boat. D got someone else to go to damaged boat, then D cancelled K. In K there was a cancellation clause

Ratio:

Impossibility test for mistake: Look at whether mistake means it is impossible to perform the K

Mistake as to the existence of some quality of the subject matter which makes the thing w/o the quality essentially different from the thing it was believed to be = K void

Analysis:

In considering whether performance of the K is impossible, it is necessary to identify what it is that the parties agreed would be performed. Involves looking at express terms as well as implication arising out of surrounding circumstances

Following elements must be present in common mistake is to avoid a K:
1. Common assumption as to the existence of a state of affairs
2. Must be no warranty by either party that the state of affairs exists
3. Non-existence of state of affairs must not be attributable to the fault of either party
4. Non-existence of state of affairs must render performance of K impossible
5. Sate of affairs may be the existence, or a vital attribute, of the consideration to be provided or circumstances which must subsist if performance of K is to be possible

Holding:

Appeal dismissed – said the difference in miles doesn’t matter – it did not render the K impossible to perform

Comments:

The law is Bell not Solle – even though after Magee we thought Bell was dead. BUT:
**Canadian Courts – don’t like Great Peace – they like Solle – so don’t forget about it – Solle gives them the opportunity to say it is not fair – use case name – Great Peace not adopted in Canada


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