Induced Mistake- Denny v Hancock

   Often sellers can induce mistake on the part of buyers, this is precisely what happened in the case of Denny v Hancock (1870). The buyer had assumed that three trees were part of the property when in fact there was an iron fence which separated them- but this was concealed by shrubbery. The plans provided by the vendor were unclear as to whether the trees were part of the property, but any reasonable person would have assumed that they were part of the land. The buyer, who had a particular interest in the trees, went on to bid on the property at auction and was successful. He then discovered that the trees were not part of the land he had purchased and refused to continue with the transaction. The plaintiffs sued for breach of contract, and were issued with a specific order of performance. The buyer appealed, stating that his decision to purchase the property was based upon being misled by the plans provided by the seller. It was held that a specific performance order could not be issued on the grounds that the mistake made by the buyer had been undoubtedly induced by the seller, therefore they were not entitled to it as a remedy as it was their own fault that the buyer had made the assumption regarding the trees. This is an instance of crassa negligentia on the part of a vendor.

Smith v Hughes- The Standard Example of Objectivity

   Smith v Hughes (1871) is frequently alluded to as the best exemplar of the objective test in practice. In a dispute over the sale of oats, it was decided that the defendant's state of mind (ie. thinking that he was purchasing old oats) was irrelevant to the case. An objective approach was applied where the fact that the parties were 'ad idem' and at cross purposes to the terms of the case were considered to be of the most importance, regardless of subjective considerations.

This case also illustrated the fact that silence cannot be considered to be a misrepresentation, which the claimant also attempted to bring an action forth for.

Snapping Up- The Case of Hartog's Hare Skins and Subjectivity

   The case of Hartog v Colin & Shields focuses on the problems arising when a unilateral mistake is made. When it is clear that someone has made a mistake in the terms of a contract, as a general rule, the other party cannot 'snap up' the offer and be able to enforce the contract. In this case, it was decided that the offeree had indeed recognised the mistake made by the plaintiff, Colin & Shields and had deliberately accepted the offer quickly and attempted to enforce it whilst being fully aware that the terms were based in a mistake. This case is similar to that of Centrovincial (1983), however, as in that instance it was unlikely that the plaintiffs could have reasonably been aware of the mistake it was ruled in the favour of the promisee.

In this case, the plaintiff has mistakenly written a price on an offer which was a third of the intended price for the product. The defendant recognised this yet still went on to accept the offer. The price which had been communicated orally prior to this was a better representation of the intended offer, so it was clear that the promisee was aware of the price which the offeror initially intended to offer, which was significantly higher than the price communicated in written form. It was held that the plaintiffs had made a mistake and that on the grounds that the defendant, Mr Hartog, could have been reasonably expected to recognise this should not be allowed to enforce the contract.

This case is demonstrative of the manner in which the courts can apply a subjective approach in certain instances. These considerations can be noted in the fact that the parties were not agreed in a subjective sense, their states of mind as to what the contract was communicating clearly did not coincide in any way. However, an objective interpretation might have taken the route that the agreement had been reached- thus should be enforced, as was done in Centrovincial. This illustrates that the courts are willing to extend beyond the scope of the objective approach in the interest of fairness to parties within a contract.

Mistakes in Contract Law- The Case of Centrovincial Estates Plc v Merchant Investors Assurance Ltd

   This case is significant in demonstrating that the subjective state of mind of the promisee can be considered to be of importance when the promisee is aware of the mistake and attempts to 'snap it up'.

In this case, the plaintiff had agreed to let the premises in question to the defendants. A letter was written to the defendants stating that the 'current market rental value' of the property was £65,000 and this was agreed to constitute an offer which the defendants then went on to accept. This offer was made by the plaintiff's solicitors and was based upon a mistake, the actual price that they had meant to feature in the offer was actually £126,000. The plaintiffs then telephoned the defendants and pointed out their mistake, this was followed by a letter from the plaintiff's solicitors who pointed out that the price they had provided was an accident. The defendants, however, asserted that the contract had already been made and that they were not to know that the price offered had been a mistake. In this instance it was held that the contract was not rendered void by the mistake, as an objective approach was taken. Aatiyah challenged the fairness of this decision, stating 'why should an offeree be entitled to create legal rights for himself by the bare act of acceptance when he has in no way relied upon the offer before being informed that it was a mistake and in reality did not reflect the intention of the offerror?'.

The reasoning behind this is simple, if the law were to take into consideration whether promises were relied upon, then this would serve to deprive contractual agreements of stability until they are relied upon. This would subvert the elements of predictability, contractual stability and certainty which are developed by the objective approach in its current format. Despite Aatiyah's criticisms being valid in terms of fairness they are ultimately devoid of pragmatism.

Contract: Acceptance

   In determining whether a contract exists, courts typically seek to establish whether there has been an agreement. In deciding this, the courts may look to see whether an offer has been made and acceptance has taken place. This is the typical make-up of a simplistic contract, however, this rule cannot be applied in all instances.

The 5 components of a contract

1. Agreement must be demonstrated, typically via offer and acceptance.
2. The agreement must be expressed in a format which is sufficiently clear, ie. it must not be vague, uncertain or incomplete.
3. There must be consideration. Consideration alludes to the fact that both the promisor and promisee must benefit and detriment within a contract. It is this detriment or benefit which is considered to constitute good consideration. However, consideration may not be a necessary component of a contract if an estoppel can be identified. Yet it is key to remember that the doctrine of promissory estoppel in the English legal system is not yet fully developed and can only be utilised as a 'shield and not a sword' as was demonstrated in Combe v Combe (1951).
4. The contract must exist in an accepted form, such as writing. The need for contracts to exist in particular formats has been diminished in modern times yet has not been wiped out altogether.
5. There must be an intent to create legal relations. This means that there must not be duress or other factors which could impinge upon a clear desire to establish a legal relationship. The law does not typically bestow social or domestic agreements with the intent to create legal relations, as typically it does not exist in such instances, yet in commercial contracts it is presumed to be present.

Why does our legal system adopt an objective approach as opposed to being subjective?

'Lord Clarke -> RTS Flexible Systems Ltd (2010)
It depends not upon their subjective state of mind, but upon a consideration of what was communicated between them by words or conduct. 

The English legal system adopts an objective outlook when deciding whether a legally binding contract exists. This means that subjective considerations, such as the state of mind of the parties are not typically taken into account. There are many reasons for this. Firstly, in transactions of a commercial nature there is the need for certainty when resolving contractual disputes. Although applying a subjective standard in such instances would lead to an individualised sense of justice, it would drag out cases significantly which would constitute an unprecedented drain on resources, not only temporally but in monetary terms.

Objectivity in Contract Law

   In English law, an objective approach is used as a 'general rule', which takes into consideration the 'words and conduct' of the parties involved as opposed to their 'subjective state of mind', as is outlined by Lord Clarke. The benefits of this are the 'certainty and predictability in commercial disputes' which is pointed out by Steyn in 'The Reasonable Expectations of Honest Men' (1997). If the law were to bestow a subjective approach with legal force, the outcome would most likely be a catastrophic one- cases would be substantially longer, the outcomes of them would be increasingly unpredictable as the individual mindsets of promisees/promisors would have to be taken into account each time, this could also be considered to constitute an additional financial burden on the part of those who do have to pursue legal proceedings. The objective test, noted by Steyn as 'the English way' is excellent at providing stability and predictability in the outcome of cases, which is of particular importance in the commercial realm.

Howarth has attempted to distinguish between the different types of objective approach which can be applied. He states that the term 'promisor' is to be used in relation to those who wish to prevent a promise from being executed, where as the term 'promisee' is to be considered to relate to those who wish to have a promise enforced. Howarth, in his text 'The Meaning of Objectivity in Contract' has distinguished between three distinct approaches.

1) Promisee objectivity -> This alludes to the way in which the reasonable promisee would interpret the terms of the promise.
2) Promisor objectivity -> The manner in which the reasonable promisor would interpret the terms.
3) Detached objectivity -> How an independent and neutral by-stander would interpret the terms of the promise.

In English law, it has been suggested that the promisee objectivity component is the most utilised component, however, this is not to state that promisor objectivity is not of importance. It is often the case that courts will consider both perspectives.

Despite the 'general rule' being in place that the subjective approach will not be considered, in instances where it has been determined that parties have attempted to 'snap up' promises which were not intended by the promisor the courts have resorted to the subjective interpretation. This is also true in instances where mistakes have been made.

Formal Conceptions of the Rule of Law

What is meant by the term 'the rule of law'?

The rule of law is an important legal principle. It checks the use of discretion by those with the authority to make decisions which influence the public. It can be considered of high importance to the judiciary who can engage it to analyse and influence the decisions made by the government.
The rule of law is more complex than this. It can be considered in both its formal and substantive precepts. These are explored by Craig in 'Formal and Substantive Conceptions of the Rule of Law' (1997).

What is the formal conception of the rule of law?

According to Craig, the formal conception of the law does not attempt to 'pass judgement' upon whether the law being considered is 'good' or 'bad' in its nature. It takes a more closed-minded outlook upon the manner in which it was promulgated, or brought into effect. For instance, was the individual who implemented the law in a position to do so? Did they follow the correct procedures to bring the law into force? Has there been adequate consideration of the 'enacted norm', ie. does the law in its new form allow a person to plan their life around it and make changes as they see fit?

Furthermore, the temporal enacted norm must be looked into- is the law here retrospective or forward looking? It is important that laws are not retrospective, ie. those who did something which was legal at the time they did it must not be penalised if it is to become illegal in the future.

What is the substantive conception of the rule of law?

The substantive conception of the rule of law seeks to extend the doctrine further by identifying which laws are good and which are bad. The formal considerations remain in place but are expanded upon by consideration as to the laws efficiency and ways in which it could be improved. Substantive rights are suggested by many to be derived from the rule of law, when these rights are adhered to within the legal framework it can be stated that the law is 'good', whereas when they are dismissed those who subscribe to the substantive school of thought would describe the law as 'bad'.

FORMAL AND SUBSTANTIVE SCHOLARS

Raz- formalist,
Dicey- argued to be a formalist by Craig,
Unger- challenged the formal conception of the ROL,
Dworkin (via Sir John Laws/Trevor Allen)- substantivist,
It is important to note that certain scholars assert that there should be a 'middle way' between the formal and substantive conception of the rule of law.

Raz's Interpretation of the Rule of Law

Joseph Raz is an advocate of the formalist conception of the rule of law. He asserts that the substantive interpretation leaves an excess of room for political debate, which is already covered and noted in political theory. There is no need to intertwine the argument as to whether laws are 'good' or 'bad' with the formal conception of the ROL. This view is identified with in his assertion that 'If the rule of law is the rule of the good law then to explain its nature is to propound a complete social philosophy'. This means that in order to provide any explanation as to why a law succeeds on substantive grounds requires the development of a political theory, making it highly impractical and pushing legal thought into political grounds whereby certain theories may be allowed to triumph over overs and bestowing the law with a political bias. Raz argues that the point of the rule of law is to impose the tautology that the govenrment should follow the law, to ensure that it is imposed through the correct mechanisms by the correct officials, to ensure that the ensuring norm is clear and that the ensuring norm takes into account temporal considerations to make sure that the new law is not retrospective. In this sense, Raz puts forth the ideal that laws should be clear, properly written and guided by impartiality. Of course there is the negative value to this, as the state is allowed to do a whole manner of things and the rule of law minimises the danger done by the law itself. There is also a positive value in the sense that even if the law is 'morally reprehensible' it must still be applied and it is necessary to ensure that individuals adhere to it.

Raz also identifies with the fact that the rule of law may have to be sacrificed as a means to benefiting the legal system in other areas. For instance, the values of clarity, temporal consideration, and following the correct mechanisms may be forgone in order to adopt more textured, open legislation. It must also be noted that there may be cases in which the law cannot be sufficiently prospective and clear to cover all future eventualities. Raz regards the rule of law as one component of the legal system, and although an important one, it must not stand in the way of the attainment of other goals within the legal realm as this would act as a detriment to development and legal evolution.

The Diceyan Conception of the Rule of Law

1. Dicey states that 'no man is punishable or can be made to suffer in body or goods except for a distinct breach of law established in the ordinary legal manner before the ordinary courts of the land. In this sense the rule of law can be contrasted with every system of government based on the exercise by persons in wide, arbitrary or discretionary powers of constraint.' This notion has been the subject of critique for Dicey's failure to identify with the utilisation of discretionary powers at his time of writing, nor the necessity for discretionary powers alongside the growth of the government in the nineteenth century.

Some have suggested that the utilisation of the word 'arbitrary' can be used to suggest that Dicey was in fact subjective in his thinking, as it suggests that laws which can be labelled as 'arbitrary' could be dismissed as bad law. However, it is clear that Dicey's first identifiable limb of the rule of law is formalist. This is because it states that 'no man is punishable' unless the correct legal procedure is followed, that the trail is fair before the courts of the land and that the breach in law must be distinct- which adheres to the clarity of the ensuring norm principle aforementioned. As for the substantive component evoked by the word 'arbitrary', this must not be dismissed, even if proper procedure is followed meaning that the law is to pass the formalist test as to its validity it may still have an arbitrary influence? Would this invalidate the law in the eyes of Dicey? Not necessarily, this is due to the fact that this component can still be bestowed with a formalist interpretation. The two formats of formal arbitrariness can be considered via the ensuring norms of clarity and temporal consideration. For instance, the law may not be worded clearly which would impede people from taking it into consideration in their lives or taking steps to alter their lifestyle. Or, alternatively, they could have not been passed by Parliament or fall under the ambit of the prerogative- making them subject to formal arbitrariness in a sense.

But which interpretation should be applied to Dicey? Firstly, the positive argument suggests that Dicey subscribed to the formalist conception of the rule of law as opposed to what has been described as 'the rule of the good law'. This is due to the manner in which Dicey utilises the term arbitrary in his discussion of the Bastille within 'Laws of the Constitution'. Dicey alludes to the Bastille as the 'visual sign of lawless power', he asserts that power there is arbitrary as it fails to rest in legality as in the English legal system. He thus heralds the English system as the better of the two. He also spends two pages lamenting over how Voltaire was twice sent to the Bastille on royal or aristocratic whims. He states that the English legal system may impose harsh laws, but it is the legality of the system which must be merited, as it prevents individuals from being incarcerated and having their freedom impinged upon without proper reason which has been established in the proper manner and written clearly in law. In this sense, it is clear to see why many argue that the use of the word 'arbitrary' denotes the formalist conception. However, it could be argued that the term arbitrary does depict a criterium by which laws can be decided to be 'good' or 'bad' as there is no criterion as to how the sense of arbitrariness was to be determined and identified with. Dicey had strong political views as is widely known, at no point is it stated that he intended these to be utilised to investigate whether a law fulfils meets the criteria of the rule of law, in this sense the need for an impartial judiciary, for clear laws and rules, for the correct mechanisms to be followed could be considered as subjectively arbitrary.

2. Dicey's second principle of the rule of law is that no man is above the law, regardless of their rank. This is evidently due to the belief that those in positions of power can utilise their authority to constrain the liberty of others for their own benefit. Dicey was criticised for his fatal misunderstanding of the French system of 'droit administratif' and for underestimating the utilisation of the administrative system in England through specialist tribunal systems, not the ordinary courts as he indicated. The equality before law principle is one which is evidently formalist in its nature, as described by Marshall it does not 'imply any qualitative view about the sort of law to which we are all subject'. The way in which Dicey opposed any law which favoured government/state officials over normal citizens could be argued to be substantive, however, beyond this, Dicey does not touch upon the principle of being substantive at all. Regardless as to whether all laws are applied in the same way, and all individuals are equal before them it could be the case that there is laws which state that the crown is exempt from all law, or that policemen and state officials can have legal defences open to them which are not available to normal citizens.

If a substantive dimension were to be applied to this then it would mean that certain groups may be subject to different rules, it would require a heavy consideration as to whether applying a certain rule to one group was compatible with applying it identically to another. Issues of such complexity would invariably have some kind of political dimension to them. Dicey does not indicate that there is any substantive element which should be applied in this sense, nor did he attempt to grapple with how the substantive version would be applied in practice. Thus, it can be considered highly likely that the formalist version of the equality before law component is the correct one, as is suggested by Craig.

3. Dicey's final limb of his interpretation of the rule of law identified with the manner in which substantive rights come to be recognised in English law, this is via a process of common law development through judicial developments as opposed to the Bills of Rights which can be seen on the continent. It is argued that this is a more effective mechanism by which individuals can protect their freedoms as it means their rights are less easily eroded. Whether this be correct or not is irrelevant to the point. It may be the case that empirical study has identified that rights vested within constitutional doctrines have greater rigidity, for instance, the right to keep and bear arms in the American Constitution, and the fact that it has only been subject to 27 amendments is testament to this. However, Dicey's interpretation withstands as a formal interpretation of the rule of law.