Solle v Butcher [1950]

Solle v Butcher [1950]

Solle v Butcher [1950] 1 KB 671 is an English contract law case that deals with the right to have a contract declared voidable in equity. Denning LJ's judgment reaffirms the existence of equitable mistakes, allowing a party to avoid a contract under certain circumstances. The court established that a contract may be set aside if one party's mistake is induced by a material misrepresentation of the other, or if there is a common misapprehension about facts or their respective rights.

Mr Charles Butcher, the landlord, leased a flat to Mr Godfrey Solle, the tenant, both believing that the Rent Acts did not apply to the property. Later, Solle claimed repayment of money over the regulated rent. Butcher counterclaimed, arguing that the contract should be void due to a common mistake about rent regulation. The Rent Acts regulated rent rises and provided rights to tenants upon renewal.

The Court of Appeal, by a majority, held that there would be no order for restitution of the overpaid rent, and the contract should be rescinded on terms. The terms allowed Solle to choose between having a lease at £250 or leaving the flat. Bucknill LJ held that there was a common mistake of fact regarding the identity of the flat and its previous rent, justifying rescission. Denning LJ, concurring, stated that the contract was valid at law but voidable in equity. He distinguished between mistakes rendering a contract void and those making it voidable, emphasising the need for equitable relief when a party seeks to take advantage of another's innocent mistake.

Denning LJ's judgment underscores that once a contract is made with sufficient certainty, it is valid unless set aside for specific reasons such as fraud or an equitable ground. He discusses the distinction between mistakes that render a contract void and those making it voidable. In this case, a common misapprehension existed, and equity had the power to set aside the contract on terms. Denning LJ also argues against extending the doctrine of mistake beyond its proper limits and stresses the importance of established rules for equitable relief.

The judgment concludes by stating that the lease can be set aside with terms imposed to prevent unjust eviction. Denning LJ suggests terms that would enable Solle to stay at the proper rent or leave, emphasising the court's duty to do what is practically just. The terms involve the defendant granting the plaintiff a license pending a new lease, serving a notice increasing the rent, and offering a new lease at the full permitted amount.

In summary, Solle v Butcher is notable for Denning LJ's exploration of equitable mistakes, emphasising the court's power to set aside contracts on equitable grounds when a party seeks to take advantage of another's innocent mistake.
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