Bell v Lever Brothers

Facts

Lever Brothers paid two directors large sums to cancel their service contracts. Unknown to the company, the directors had breached those contracts and could have been dismissed without compensation.

Issue

Did the common mistake make the settlement void?

Held

No. The mistake did not make the subject matter essentially different from what the parties believed.

Principle

A common mistake voids a contract only if it is fundamental.

Why it matters

It shows keep common mistake narrow.

For study only. By lanbuk.com. Always check current sources and consult a qualified professional.