Great Peace Shipping v Tsavliris

Legal Case Summary

Great Peace Shipping Ltd v Tsavliris Salvage International) Ltd [2003] QB 679

Contract – Common Mistake – Void – Agreement – Mistake

Facts

The defendants, Tsavliris Salvage International Ltd, were a company that offered salvaging facilities to ships in the South Indian Ocean that needed assistance. A ship called the Cape Providence required help after it had endured structural damage at sea. The defendants looked for any merchant vessels that were nearby to assist them. The complainants, Great Peace Shipping Ltd, said they were the closest to the ship, being around 30 miles away. On this information, the defendants commissioned the complainants to help the ship. In fact, this was a mistake and the complainants were around 400 miles away from the ship. Since the Cape Providence was in desperate need of help, as it was sinking, the defendants cancelled the contract with the complainants and asked another ship for assistance.

Issues

The claimant had sued for their contract fee with the defendants. The defendants argued that the distance from the Cape Providence was a common mistake and this would invalidate the contract that they had for providing assistance. The issue in this case was whether this was a common mistake and if it could void the contract.

Decision / Outcome

It was held that this was not a common mistake that would void the contract between the complainant and defendant. It was a matter of quality of the performance of the contract. The miles did not matter and it did not make the contract impossible to perform. A common mistake requires an element to make contract performance impossible and mileage was not fundamental enough to render the contract void.