If on the other hand the mistake is as to something

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If, on the other hand, the mistake is as to something less fundamental (such that the contract may still have been entered into but on somewhat different terms), the contract is not automatically void; it is merely voidable at the option of the party who made the mistake. The difference between void and voidable contracts is that, with voidable contracts, the court has a discretion and may or may not allow the contract to be terminated. Generally, termination will not be permitted if the parties cannot be restored to their original positions
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© Stephen Graw 2012 32 (at least substantially), or if the rights of some third party who has acquired an interest in the subject matter of the contract would thereby be prejudiced. Rectification Occasionally, the courts will allow a contract which was entered into as the result of a mistake to be ‘rectified’. Rectification is an order of a court which corrects mistakes that were made in writing up the agreement. The mistaken words are struck out and words reflecting what was actually agreed are substituted for them. It must be clear however that both parties originally intended to be bound by the agreement as rectified. If that was not the case the court will not order rectification. For example, in Budget Stationery Supplies Pty Ltd v National Australia Bank Ltd (1996) 7 BPR 14,891 the National Australia Bank sought rectification of an installment loan agreement that it had entered into with the plaintiff company. It had, by mistake, send the plaintiff company a schedule of conditions showing that the plaintiff was required to pay 60 installments each of $5050 to discharge the loan. This figure was inconsistent with the conditions setting out the interest on the loan but they were consistent with the plaintiff’s intention to enter into a loan for 5 years only. The bank argued that when the specific interest provisions were looked at it was clear that a 15 year loan term was intended. The court held that, in the absence of any clearly discernible common intent to enter into a 15 year loan, there were no grounds upon which rectification could be ordered. The 5 year term stood. (NB. The court in that case also applied the contra proferentem rule against the bank. After all, the bank had drafted the loan conditions and presented them to the plaintiffs on a ‘take it or leave it’ basis. Consequently, any ambiguity had to be resolved in the customer’s favour.) Duress The legal meaning Duress is pressure exerted by one party to coerce another to contract on particular terms. To impair the enforceability of any resulting contract the pressure exerted must be such that it would cause a reasonable person, exercising an ordinary degree of firmness, to do something that he or she would not otherwise do. That is, the duress will be such that he or she will choose to submit to the demand or to the pressure rather than take some alternative course of action.
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