Common Mistake in Contract Law

English law has long struggled to understand the effect of a fundamental common mistake in contract formation. Bell v Lever Brothers Ltd [1932] AC 161 recognises that a common mistake which totally undermines a contract renders it void. Solle v Butcher [1950] 1 KB 671 recognises a doctrine of 'mistake in equity' under which a serious common mistake in contract formation falling short of totally undermining the contract could give an adversely affected party the right to rescind the contract. This article accepts that the enormous difficulty in differentiating these two kinds of mistake justifies the insistence by the Court of Appeal in The Great Peace [2003] QB 679 that there can be only one doctrine of common mistake. However, the article proceeds to argue that where the risk of the commonly mistaken matter is not allocated by the contract itself a better doctrine would be that the contract is voidable.

ARE OECD MACROECONOMIC VARIABLES TREND STATIONARY? EVIDENCE FROM PANEL STATIONARITY TESTS ALLOWING FOR A STRUCTURAL BREAK AND CROSS-SECTIONAL DEPENDENCE

This article applies the panel stationarity test with a break proposed by Hadri and Rao (2008) to examine whether 14 macroeconomic variables of OECD countries can be best represented as random walk or stationary fluctuations around a deterministic trend. In contrast to previous studies, based essentially on visual inspection of the break type or just applying the most general break model, we use a model selection procedure based on BIC. We do this for each time series so that heterogeneous break models are allowed for in the panel. Our results suggest, overwhelmingly, that if we account for a structural break, cross-sectional dependence and choose the break models to be congruent with the data, then the null of stationarity cannot be rejected for all the 14 macroeconomic variables examined in this article. This is in sharp contrast with the results obtained by Hurlin (2004), using the same data but a different methodology.