Difference in unilateral mistake-common and mutual mistake

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Reference no: EM133936108

Question 1.

Sam places an order for 500 HP printers which had been mistakenly offered for sale at a price of $5 per piece on the website of TechnoBuzz, an online retailer. Being IT saavy, Sam is aware that the actual price of each printer is $5,800. The retailer sends Sam a confirmation that his order has been processed and he will be receiving the merchandise in a week's time. Two days later, after learning of the mistake, TechnoBuzz informs Sam that it will not be performing the contract.

1. In general, what is the effect of mistake on a contract? Why is the law reluctant to allow parties to get out of a contract on the basis that they had "made a mistake"?

2. Explain briefly the difference between a unilateral mistake, a common mistake and a mutual mistake. What impact do these forms of mistake have on the contract?

3. Can Sam sue TechnoBuzz for breach of contract? Give reasons for your answer.

Question 2.

Paul, a football enthusiast, sets up a website UcanBetonIt offering bets on English Premier League soccer matches. Paul's website is highly popular as it offers better odds compared to operators such as Singapore Pools. One weekend, Justin places a $500 bet on a clash between Liverpool and Manchester United. Justin wins and contacts Paul for payment but Paul refuses to pay.

On a separate occasion, Paul's uncle Lim, agrees to employ him as a sales manager. Paul's agreed monthly salary is $8,000. However, in order to pay less tax, Paul's uncle agrees to falsify Paul's written employment contract to reflect his salary as $5,000 a month. Paul's uncle also agrees to under declare his salary in the company's annual tax submission to IRAS. Of late, Paul's uncle has failed to pay Paul the full amount of $8,000. When confronted by Paul, his uncle denies that Paul's salary is $8,000 and insists that under the contract, Paul's salary should only be $5,000.

1. Explain any two types of contracts that are illegal at common law.

2. Explain any two types of contracts that are illegal by statute.

3. In general, what is the effect of illegality on a contract?

4. Explain whether Justin will be able to sue Paul to recover his winnings.

5. Explain whether Paul can sue his uncle's company to claim his unpaid salary.

Reference no: EM133936108

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