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Apr 30, 2024 · Bell v. Lever Brothers Ltd (1932) has profoundly influenced the legal landscape regarding the role of mistake in contract law. This landmark decision clarified the conditions under which a contract can be voided due to mistakes.
Lever Bros contracted Bell to act as chairman of the Niger’s board of directors for £8000 a year. They then contracted Snelling to be vice-chairman for £6000 a year. Both Bell and Snelling began secretly speculating on the cocoa market using their own money.
Bell v Lever Brothers Ltd [1931] UKHL 2 is an English contract law case decided by the House of Lords. Within the field of mistake in English law, it holds that common mistake does not lead to a void contract unless the mistake is fundamental to the identity of the contract.
- Key Point
- Facts
- Held
- Lord Atkin
- Commentary
A contract is void for mistake as to quality only if the quality is sufficiently fundamental, without which the thing will be essentially different.
Niger Company is a subsidiary of Lever Bros (C), dealing with commodities including Cocoa.When Niger Company merged with another company, employees D1 and D2 were terminated.C entered into severance agreements with D1 and D2 for sums of £30,000 and £20,000 respectively.C later discovered that Ds had been trading Cocoa on their own account which would have given them the right to terminate employment contract without compensation.The common mistake was a mistake to quality that was not sufficiently fundamental to not render the severance agreements void.
Common mistakes that render contract void 1. Mistake as to existence: Where subject matter is non-existent the contract is void. 2. Mistake as to title: Where buyer is already the owner of what the seller is selling, the transfer of ownership is impossible, the contract is void e.g. Cooper v Phibbs: the claimant agreed to take a lease of a fishery ...
This is the leading case on common mistake which lays out the categories of common mistake which can render a contract: 1. mistake as to an essential quality of goods sold, 2. mistake as to the existence of goods sold, and 3. mistake as to the title of goods sold.
The outstanding case of recent years, Bell v. Lever Bros., Ltd. (1931), met with such universal and (if it may humbly be said) unmerited hostility from publicists in all quarters that this alone calls for an inquiry into the difficulties of the subject.
Jan 4, 2024 · FACTS. Mr. Bell held the position of managing director for a span of five years in a company owned by Lever Bros. Ltd. During his tenure, Mr. Bell engaged in personal trading activities for personal profit, a conduct that contravened the terms of his employment contract with the company.
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Bell v Lever bros [1932] AC 161 House of Lords. Lever bros appointed Mr Bell and Mr Snelling (the two defendants) as Chairman and Vice Chairman to run a subsidiary company called Niger. Under the contract of employment the appointments were to run 5 years.
