Great Peace Shipping v Tsavliris Salvage (International)

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Citation: Great Peace Shipping Ltd v Tsavliris Salvage (International) Ltd [2003] QB 679

This information can be found in the Casebook: Paterson, Robertson & Duke, Contract: Cases and Materials (Lawbook Co, 11th ed, 2009), pp. 774 [31.65], 778-82 [33.85-33.90]

Contents

Background facts

  • The Defendant [Tsavliris] chartered the Plaintiff's [Great Peace] because it needed to provide salvage services to another ship.
  • It did so based on information that the Plaintiff's ship was pretty close to the ship the Defendant needed to salvage, but in fact is was really really far.
  • When it found out, the Defendant waited until it managed to charter a closer ship, and then notified the Plaintiff that the agreement is cancelled.
  • The Plaintiff sought payment.

Legal issues

Judgement

  • The judgment in Solle v Butcher is wrong. The common law can declare contracts void due to mistakes.
  • However, if a contract is not void in common law, it cannot be voidable in equity because of a common mistake (direct opposition to Solle v Butcher).
    • "there is no jurisdiction to grant rescission of a contract on the ground of common mistake where that contract is valid and enforceable on ordinary principles of contract law."[1]
  • The test remains whether the mistake was so great that the contract is essentially a different thing from what it was believed to be. If yes, it is void.
  • In this case, the fact that the Defendant didn't immediately cancel the contract once it obtained knowledge of the mistake shows that the Defendant did not regard the contract as devoid of purpose, therefore there is no fundamental or essential mistake.
  • Plaintiff wins.

References

  1. [2003] QB 679, 725
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