Question

A denial of contractual liability in all instances where the parties are not in agreement could result in undue hardship for a

party who has incurred expense in reasonable reliance on the existence of a contract, and further more, would greatly
affect the reliability of contractual commitments. The courts have alternated between qualifying the subjective and
objective bases of contract in order to solve this problem.
Discuss the approaches used by our courts to limit the effect of valid mistake on the validity of a contract.

Answer 1

Answer: Your welcome!

Step-by-step explanation:

Our courts have used several approaches to limit the effect of valid mistake on the validity of a contract. These approaches are generally based on the two approaches of subjective and objective theory of contracts.

The subjective approach is used when the court considers the parties’ actual beliefs at the time of entering into the contract. If it can be established that both parties were genuinely mistaken about a matter of fact, then the contract can be set aside. This approach is often used when a mistake of fact was made by both parties, and it is clear that the mistake would have made a difference to the outcome of the contract had they been aware of it.

The objective approach is used when the court considers the reasonable beliefs of both parties at the time of entering into the contract. This is based on the idea that if an objectively reasonable person would have been aware of the mistake, then the mistake should not invalidate the contract. This approach is often used when a mistake of law was made by one of the parties.

Both approaches are used by courts to limit the effect of valid mistake on the validity of a contract. This enables courts to ensure that parties are not disadvantaged by mistakes made in the formation of a contract, while still ensuring that contracts are upheld when mistakes are objectively reasonable.