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.