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Great Peace Shipping v Tsavliris International [2003] QB 679 Court of Appeal

A ship, The Cape Providence, suffered structural damage in the South Indian Ocean. The defendants offered a salvage service which was accepted by the ship owners. The defendants made inquiries as to the nearest salvage ship and were informed that The Great Peace was 35 miles away. They then entered a contract with Great Peace Shipping (GPS) to engage The Great Peace to do the salvage work. In fact The Great Peace was 410 miles away at the time. When the defendants learnt of the actual distance they searched for a closer ship as they believed the Cape Providence was close to sinking and needed to rescue the crew. They found a closer ship and tried cancelled the contract GPS. However, GPS refused to cancel the contract and brought an action for breach. The defendants sought to argue that the contract was void for mistake at common law, alternatively that it was voidable for mistake in equity.

The Court of Appeal held that both claims failed. Equity does not provide relief from mistakes where the common law does not provide relief. At common law the mistake did not render the contract essentially different from that which it was believed to be.

Back to lecture outline on Mistake in Contract Law