Cooper v Phibbs [1867]

Cooper v Phibbs [1867] UKHL 1 is a significant legal precedent concerning the doctrine of mistake in English contract law. The case illustrates how a contract can be rendered unenforceable if both parties are mistaken about the legal possibility of its performance.

The factual background involved an uncle who, unintentionally misinformed his nephew about the ownership of a fishery. The nephew, acting upon this misinformation after the uncle's death, entered into an agreement to lease the fishery from the uncle's daughters. Unknown to the nephew, he was the true beneficial owner of the fishery due to a life tenancy granted in the uncle's will.

The House of Lords held that the contract was voidable at the nephew's instance, as there existed a mistake regarding the possibility, in law, of performing the contract. Lord Cranworth emphasised that the nephew had entered into an agreement for the lease of property that was, in truth, already his own. This common mistake, induced by the uncle's misinformation, warranted relief for the nephew. However, the court acknowledged the substantial expenses incurred by the daughters' father in developing the fishery and deemed it necessary to remit the case to the Court of Chancery in Ireland for further consideration.

Lord Westbury concurred, highlighting the mutual mistake of the parties regarding their respective rights and the need for equity to set aside the agreement. He stressed that private rights of ownership, being matters of fact, could be affected by a mutual mistake, rendering the agreement voidable. Lord Colonsay also concurred with this reasoning.

This doctrine of mistake in equity was later discussed by Denning LJ in Solle v Butcher [1950], which emphasised that mistakes in equity render a contract voidable rather than void. However, the notion of mistake in equity was later debated, with some arguing its abolition in The Great Peace Shipping [2002], leading to ongoing controversy in legal interpretation.
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