Issue
If Reliabuild claims the $350,000 from Bill as damages for breach of contract, Will Bill succeed in his defense?
Rule of Law
Mistakes in contract law occur when there is an inaccurate understanding by one or more parties to a contract and could be significant as a basis to cancel an agreement.
Analysis
A mistake at common law, sometimes called a common initial mistake, occurs when both parties make a similar error that influences the grounds of the agreement and a core aspect of the contract. The common initial mistake takes three forms: as to the existence of subject matter (res extinct), as to title, and as to the quality of the subject matter of the contract. The most relatable of the three types of the common initial mistake to the case in discussion is the one as to the quality of subject matter (Beale et al. 33). Such a form of common mistakes implies that the contract can be considered null if the subject matter of the contract in a real sense does not give quality as anticipated by those involved in the contract.
A mistake as to the quality of the subject matter is strongly related to Reliabuild and Bill scenario. During the period of the contract, Bill proposed his cost of $550,000 mistakenly, which became the agreed price. However, when he realized that he just made an error and going ahead with the contract would cause a loss of $250,000 to his business, he terminated it. Bill can have a defense to the extent that he was not deceptive in his bid as he noted his error. As much as the contract could be held as not void, and only a mistake as to quality was committed, the contract could still be validated and bind Bill. The case of Bill and Reliabuild resembles Oscar Chess Ltd v. Williams one where the contract was not considered void (Beale et al. 33). The case was void even if it was established that because of the age of the vehicle more cash could have been received from the contracting party.
The compensation Reliabuild could claim as a result of Bill breaching the contract could also be considered by calculating loss on the basis of reliance. Reliance loss occurs if the claimant is restored to the state he would have been had the contract not been made (Beale et al. 33). It could be by giving the claimant the compensation of the loss due to him or her because of the breach. Reliabuild relied on the services of Bill to accomplish the project they wanted to do. Reliabuild ended up contracting other bidders and he was obliged to pay $350,000 more than it was originally expected because of the withdrawal of Bill. Reliabuild had calculated its own bid based on the figure that Bill gave them.
The case is also similar to Anglia Television Ltd v. Reed where one person joined a contract with the plaintiff, and he later left the entire project (Beale et al. 40). The plaintiffs had no option but to find another service provider, which led to extra costs. The plaintiffs made a claim on what was lost when the actor left the project, instead of suing on expectation losses. Reliabuild could also place its claim under loss of bargain. In this claim, the injured party should prove the value that has probably been lost, which Reliabuild can evidently do. Compensation for the losses is determined by the position of the parties in causing the damages that were experienced in the contractual relationship.
Conclusion
Reliabuild should be compensated by Bill for the loss of $250,000, because Bill withdrew from the project after he was contracted.
Work Cited
Beale, Hugh, et al. “Cases, Materials and Text on Contract Law.” Bloomsbury Publishing, 2019.