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Settlement Agreements, Legal Information and the Mistake of Law Rule in Contract

Collins, D. A. (2010). Settlement Agreements, Legal Information and the Mistake of Law Rule in Contract. Northern Ireland Legal Quarterly, 61(1), pp. 1-16.


The extent of the doctrine of contractual mistake of law is evaluated in light of the Court of Appeal’s decision in Brennan v Bolt Burdon through the lens of economic efficiency, the associated incentivization of productive information acquisition and contractual risk allocation. The Brennan court’s decision limits the relief available for claims of mistake grounded in unanticipated changes in the law to mistakes involving exceptional errors. In so doing it acknowledges the risk inherent in accepting contractual settlement offers as a matter of commercial risk taking which can be offset through express contractual limitation, subject to public policy concerns. The article considers the effects of such contractual risk allocation as well as the cost of dispelling ignorance to recommend a clarification of the scope of the mistake of law. This rule is based upon the gains to be achieved from the underlying contract to the contractual parties as well advantages to society engendered by the dissemination of information about the law itself.

Publication Type: Article
Publisher Keywords: Contract, Mistake of Law, Settlement Agreements
Subjects: K Law > KD England and Wales
Departments: The City Law School > Academic Programmes
The City Law School > International Law and Affairs Group
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