2. A party seeking excuse on the basis of mutual mistake must
show:
◦ (1) that the parties entered the contract under a mistaken
belief that is basic to the contract, and
◦ (2) that the party ought not to bear the loss caused by the
event.
◦ When is a mistake “mutual”?
◦ We look at Griffith v. Brymer to answer that question.
3. The case involves contract to rent rooms to watch King Edward's
coronation parade. The parade was canceled, and the renter wanted out
of the contract. Just like the frustration case of Krell v. Henry.
In Griffith the court it lets the renter out of the contract--but this time
it says because there was a "missupposition of the state of the facts
which went to the whole root of the matter."
Note the that the decision to cancel the parade was made at 10:00 AM
on 6/24/02; the contract was signed at 11:00 AM that same day.
When they signed the contract both parties still thought--mistakenly-
-that the parade would take place. This is the "missupposition".
The difference between frustration and mistake is basically a question
of timing.
4. June 26, 1902 June 26, 1902
announcement
The parties arrive at the
belief independently,
based on their own
assessment of the
evidence
Examine safe
5. The assumption has to be one that would be relevant to the
parties’ willingness to enter the contract if they thought the
assumption was false.
6. Enforce
Griffith gets rent twice
Rents it again when parade
rescheduled
Brymer pays for nothing
Not enforce
Griffith no worse off than
if parade had not been
canceled
Rents again when the
parade is rescheduled
Brymer does not pay for
nothing
Which option do you think is better?
7. The information/control approach.
Ask: who is in a better position to have information relevant
to avoiding the loss?
◦ Note in Griffith there is no difference between the parties in this
regard.
Who is in a better position to take steps to avoid the loss?
◦ Again, in Griffith there is no difference between the parties in this
regard.
Note the parallel with the Hadley rule.
8. Jones bought a safe at an estate auction. Before taking bids, the
auctioneer noted that the safe contained an inner door that was
locked and would have to be opened by a professional
locksmith. Jones paid $50 for the safe; he later found over
$32,000 in the compartment behind the inner door. (City of
Everett v. Estate of Sumstad 631 P.2d 266 (1981).)
Both parties believed that there was nothing of value behind the
locked door.
Can the estate rescind the contract on grounds of mistake?
(a) Yes
(b) No
9. Information: The estate
◦ In control of the safe
◦ Makes more sense for the state to bear the investigative expense
Control
◦ The estate is in possession of the safe and controls access to it.
10. Steve Sowle is the manager and lead singer of the band, Sounds of Sowle, which
specializes in the big band sound of the 1940s. The band has just produced its first
CD, Sowle First. Sowle is contacted by Steve, “Hey, Man,” Heyman of Heyman’s Hang
Out. Heyman says, “I will pay you $5000 for one night to perform at Heyman’s Hang
Out to sing your “Sowle” music on December 7.” Sowle responds by saying, “That’s a
deal. Heyman happens to think “Sowle” music means rhythm and blues, not the big
band sound Sowle thought Heyman meant. Neither Sowle nor Heyman was aware of
the misunderstanding. The Sowle Sounds band is very popular, and Heyman hired
them because of that. He does not really care what kind of music the band plays.
Heyman claims that mistake doctrine excuses him from his contractual obligations
to Sowle.
(a) Heyman is correct.
(b) Heyman is not correct.
