than one policy when constructing a taxonomy of error. Most systems use a combination of policies, which inevitably poses complications for classifying the types of case and may lead to tensions between the policies implemented. Thus, a system which wanted both to correct induced errors, but also to favour objectivity for reasons of commercial certainty, would be faced with a tension in the result to be reached in a case where a party appeared to consent to a contract, but later argued that it was misled by the other party; a tension would similarly exist if a system wanted to favour subjectivity, at the same time as protecting third parties. Such tensions are not always incapable of solution, as a decision can be taken that one policy trumps another where they conflict (for instance, by preferring the prevention of misrepresentation over the certainty of settled transactions, or vice versa), but self-evidently just solutions are sometimes more elusive given the complexity of the factual situations in which error is pled.

(b)  Constructing workable classifications which implement the policies chosen

Sometimes adopted classifications seem not to embody any clearly thought-out policies of the legal system in question, or occasionally, even if there appear to be clear policies, the classification chosen is not very adept at implementing those policies.

(i)  Roman Law

One searches in vain in classical Roman law for any clear policy on error. It did not occur to classical Roman jurists or courts to construct a single concept of error across contract law given that there was no law of contract as such but distinct actions. That law was concerned with the form of what was done: if the prescribed form had been complied with, there was an irrebuttable presumption that this represented the will of the parties. However, by the Justinianic period, a discernible doctrine of error had developed, this resting upon certain types of mistake which could be said to preclude consensus. Thus, in D. 18.1.9, we find it stated that, in contracts of sale, an error as to the substance of the subject being transacted precludes consent.208 The natural place for the beginnings of a generalised

208‘It is obvious that agreement is of the essence in sale and purchase; the purchase is not valid if there be disagreement over the contract itself, the price, or any other element of the sale’ (In venditionibus et emptionibus consensum debere intercedere palam est: ceterum sive in ipsa emptione dissentient sive in pretio sive in quo alio, emptio imperfecta est).

consensual law of error was in the treatment of consensual contracts like sale, given their foundation on the consent of the parties rather than mere compliance with a particular form.

The classification worked out for consensual contracts saw operative errors as falling in to one of a number of types:

(1)Errors as to the subject matter, as in the example narrated in D. 18.1.9 of an error relating to a plot of land to be sold. This category embodied the concern that what counts is the ‘substance’ or ‘essence’ of the thing in question (for instance, whether it is wine as compared to vinegar), with the view being taken that sales of things believed to be of one substance, but which were in fact of another, were invalid.209 There has been some rather inconclusive debate over whether the authors of the Roman legal texts which make reference to the idea of the ‘substance’ of a thing may or may not have had in mind the Aristotelian conception of substance, though that is certainly how medieval scholars interpreted the Roman texts.210

(2)Errors as to the price.211

(3)Errors as to the nature of the transaction. The Digest uses the example of parties who are confused as to whether money has been handed over as a deposit or as a loan: given the irresolvable difference of their opinions on this point, there can be no contract in such a case.212

(4)Errors as to the identity of the other contracting party.213

In this Justinianic classification, it seems not to matter whether one party was mistaken, or both were,214 or that one of the parties may have been at fault in arriving at, or in inducing, the error. The Justinianic scheme was to be heavily influential in forming the treatment of error in later civilian and mixed legal systems, right down to the twentieth century, in many systems the view being taken that any of the four types of error listed above constituted ‘essential’ error, in the sense of being relevant error. However, the Roman scheme has now largely lost its attraction. The reason for this is a simple one: a classification of error according to subject matter, price, nature of the transaction and identity of the parties, though focusing on matters which are doubtless important to the

214Some texts clearly indicate cases of a mistake shared by both parties, for instance D. 18.1.14 and D. 18.1.41.1.

parties, is a classification which does not explain why sometimes an error apparently falling into one these types is thought to be relevant, but sometimes not. For instance, in the modern law, the view is taken that a party who buys vinegar thinking it is wine will not always be able to avoid the contract. But to explain why this is so one needs to have regard to matters other than the subject matter of the contract, in particular how the party arrived at its erroneous view. The Roman classification is based entirely on a non-fault, subjective understanding approach to error, and as such does not embody all the policy considerations that the modern law would wish to implement in constructing its rules on error. Even in the Justinianic period, the limitations of the classification were already obvious, it not always being clear when, for instance, an object was of a particular ‘substance’ or not.215

(ii)  The Common law

The Common law, like Roman law, was originally a law built upon actions, again making it difficult for single, contract-wide policies on error to emerge, the division between law and equity also enabling some policies to flourish in equity but not in law. Indeed, it has been remarked by a number of observers that until the middle of the nineteenth century English courts provided almost no analysis of contract based upon the idea of consent or mistake,216 a position which contrasts starkly with the civilian systems.

While one might draw within the ambit of mistake, widely defined, a large category of cases (including, for instance, promissory estoppel, which might be said to be based on the reliance placed on an erroneously created impression), for the moment it is useful to mention just the classic cases of remediable mistake in the Common law. The types of such mistake fall into narrowly drawn categories:

(1)unilateral error: unilateral error provides only very limited grounds for correction in English law. Where a mistake by one party, known about by the other, is taken advantage of by the other, then the contract may be avoided, but only where the mistake concerns a matter

215The Digest itself contains discussion of borderline cases. For instance, an object sold as gold but which is only gilded is nonetheless seen in D. 18.1.14 as a valid sale, but this view of Ulpian contradicts the opposite approach of Julian given in D. 18.1.41.1. This shows the limitations of the concept of the essence or substance of a thing.

216See Gordley, Philosophical Origins, p. 144; Ibbetson, A Historical Introduction, pp. 226–9. Ibbetson notes that the first writer to provide a mistake-based analysis was Macpherson in 1860, writing on Anglo-Indian contract law, followed by Leake in 1867.

which has been made a term of the contract.217 This point was affirmed recently in Statoil ASA v. Louis Dreyfus Energy Services LP,218 where the wrong date for an event was used by one party to calculate the contract price, a mistake known about by the other party, who simply chose to remain silent. The court found that the mistake in question, as to the date of the relevant event, was not itself a term of the contract, and therefore that it did not found a ground for avoiding the contract on the basis of unilateral error.219 Of course, even if the matter has been made a term of the contract – price being a clear example – if the other party does not know that the wrong price was indicated (as will usually be the case with fixed price contracts), then it can hardly have taken advantage of the mistake, and the contract will stand.220

(2)induced error: where a misrepresentation has been made, the contract may be avoided. A misrepresentation is a misleading or untrue statement of fact made by one party to the other which has, to some extent, persuaded that other party to enter into the contract (in other words, there must be demonstrable reliance on the misrepresentation221). It is crucial to note, however, that the doctrine of misrepresentation is an aspect of tort law: the tortious act allows avoidance of the contract. The tortious nature of misrepresentation demonstrates the emphasis upon the wrongful aspect of the error rather than just the mere fact of the error, and demonstrates the operation of a strong policy concerning the allocation of blame and risk in the law of error.

(3)common or shared error: this is a mistake on a fundamental matter (interpreted narrowly) which is common to both parties’ intentions, that is they share a subjective mistake about the objective nature of the contract or some matter pertaining to it.222 Thus a sale of nonexistent goods which the parties mistakenly believe exist is void, as this shared view does not reflect the reality of the circumstances.223

217There must be an error in transaction, rather than an error as to motive, to put it in Germanic terms.

218[2008] EHWC 2257 (Comm).

219Reference was made in the court’s judgment to the Singaporean case Chwee Kin Keong v. Digilandmall.com Pte Ltd [2005] SGCA 2, in which a party taking advantage of a misquoted price it knew to be wrong was not allowed to hold the contract as concluded. That case was distinguished on the basis that the error related to a term of the contract, the price.

220Centrovincial Estates plc v. Merchant Investors Assurance Co. Ltd [1983] Com LR 158.

221Pan Atlantic Insurance Co. Ltd v. Pine Top Insurance Co. Ltd [1995] 1 AC 501.

222Bell v. Lever Bros Ltd [1932] AC 161 (HL); Grains & Fourrages SA v. Huyton [1997] 1 Lloyd’s Rep 628; Great Peace Shipping Ltd v. Tsavliris Salvage [2003] QB 679 (CA).

223Couturier v. Hastie (1856) 5 HLC 673.

As in Roman law however, difficulties arise in determining when one is dealing with a mistake about a fundamental matter. There is, for instance, a difficulty of deciding when a thing is not the thing the parties thought it was, and when it is merely different in quality without that difference amounting to a difference in the type of thing (a matter which does not create a relevant mistake, though it may found remedies under relevant sales legislation, for instance224).

(4)mutual error: this concerns cases where parties are at cross purposes on some matter which they have made a term of the contract, and neither view can be said objectively to be the correct one. Because in a sense neither party is actually in error, each simply holding a perfectly reasonable though incompatible intention, these cases of alleged error are normally explained in doctrinal terms as a failure to reach consensus. Thus, if both parties stipulate for the purchase of goods aboard a named ship in a particular harbour, but there are two ships with such a name, each party reasonably meaning a different ship, there is no subjective or objective agreement and thus no contract.225 Such cases are rare, as often one party’s view of a matter is thought by courts to be objectively the reasonable one, and thus that view is preferred and the other party held to it.226 Moreover, if the matter over which parties are at odds was not put forward as being part of the agreement, a disagreement on it will be irrelevant.

The overall character of the modern Common law of mistake shows a preference­ for enforcing objectively declared intentions, while allowing subjective intent (or sometimes, more strictly, presumed subjective intent)227 to be pled in the face of an objective declaration of consent where

224Under the Sale of Goods Act 1979, s. 14.

225Raffles v. Wichelhaus (1864) 2 H&C 906, 159 ER 375.

226Smith v. Hughes (1871) LR 6 QB 597.

227What is meant is that, unless a party was acting unconsciously, it can always be said to have intended subjectively what it in fact did. So, to capture more accurately the nature of some relevant pleas of error, one requires to say that what the party is arguing is that, had it known the true position, it would subjectively have intended some other result (either no contract, or a different contract), and it is this alternative, counterfactual, and thus presumed subjective intent, which ought to prevail: for shorthand purposes, this can simply be referred to as its ‘subjective intent’. The same distinction can be said to arise in cases of extortion: though one can argue that a party subject to extortion did subjectively intend to do what it did (by choosing to avoid the threats made against it), and indeed German law takes this view, what such party is arguing is that it would not subjectively have intended to do what it did in the absence of the extortion, and it is such alternate or presumed subjective intent which ought to prevail (see further the discussion of extortion below at pp. 257ff).