Here is another blog clinic question from Harry
My son yesterday was telling me about his best mate who has recently signed a tenancy agreement and been handed the keys to a new unfurnised flat in Middlesbrough only to be told that they might have been a clerical error and he may have to move out of the flat.
My question is `Is the tenancy agreement legally binding` and should my sons best mate stick it out and refuse to budge? What about new furniture for his flat, should he go ahead and buy
My view is that the tenancy is binding on the landlord. If he has made a clerical error, or his agent has, then they will just have to put up with it. From what you say, it sound as if the tenancy has been validly created and the landlord can’t get out of it.
However I think your friend should find out a bit more, before actually buying furniture. There may be something important we have not been told.
The doctrines around mistake are well defined in case law. If the landlord intended to create some kind of tenancy with someone, even if not in the terms currently agreed or with the party agreed, the upshot (in the absence of any further and better details) is he is stuck with this. he could of course negotiate or buy his way to an amicable cessation of the contract.
In Solle v Butcher [1950] P had agreed to rent D’s apartment. Both parties did not know that the apartment was subject to rent controls. When P discovered this fact she claimed for return of excess rent paid. Held: P won insofar as the court recognised that the contract was based upon a mistake but only made the contract voidable rather than void. Thus, P had the choice of walking away from the tenancy agreement. The difficulty arose because before the fusion of common law and equity, the common law courts, to do justice, extended the doctrine of mistake beyond its proper limits and rendered void what was only voidable and thus did injustice to the party who had acted on the assumption that there was a contract. Now there is no need to do that; it is only void if the mistake prevents the formation of the contract. In equity, the contract may be set aside if the parties are under a common misapprehension as to the facts, or their relative rights, or if it is fundamental and the party seeking to set it aside is not at fault.
Once the contract was made, then it was good, unless set aside for failure of some condition on which the contract depends – for fraud, or for some equitable ground. Neither party can rely on their own mistake to say it was a nullity from the beginning – even if it was thought to be fundamental – it doesn’t matter if the other party knew they were under a mistake. A fortiori, if the other party caused the mistake.
Here both parties believed themselves to be entering into a contract to occupy land for a period of time but that was apparently due to a clerical error and that mistake was in one sense essential or fundamental. But such a mistake does not void the contract. There was no mistake at all about the subject matter of the contract, it was specific. The parties were agreed in the same terms on the same subject matter and that is sufficient to make a contract. The contract is binding and due to the injustice to the tenant a court of equity is unlikely to set it aside.