Amalgamated Investment v John Walker - Case Summary

Amalgamated Investment & Property Co Ltd v John Walker & Sons Ltd [1977] 1 WLR 164

Contract – Common Mistake – Frustration of Agreement – Historic Interest – Property – Formation of the Contract – Mutual Mistake – Sale

Facts

The defendant, John Walker & Sons Ltd, advertised their warehouse for sale, either for occupation or redevelopment of the property. It had been previously used for making whiskey. The complainants, Amalgamated Investment & Property Co Ltd, bought this warehouse for £1,710,000. In the process of the sale, the complainants had asked the defendants whether the warehouse was registered as an architectural or historic interest building. The defendants had told them that it was not. However, it became a listed building on 22 August 1973 and the contract was signed on 25^th September 1973. The defendant was informed that it had become a listed building.

Issues

The complainants argued that the contract should be set aside over the common mistake of the building being listed as historic. Alternatively, they argued for frustration of the contract. The issue in this case was whether the contract could be set aside for common mistake or whether there was frustration of the contract.

Decision/Outcome

The appeal from the complainant was dismissed. It was held that the building was listed on the 27^th September 1973 and the contract had not been frustrated nor would it be set aside. The Court of Appeal stated that the complainants had taken on the risk of the warehouse becoming or being listed as an architectural or history building and this was demonstrated by their enquires prior to the sale. In order for a contract to be set aside, there must be a common mistake made during the formation of the contract and sale; this was not the case here.