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Well, we are stumbling towards a principled distinction, I think. This is between transactions which are fully executed on the same occasion as they are agreed (such as payment of a debt, or a purchase in a supermarket), and transactions which remain executory for a significant period (such as a hire-purchase contract, or an interest rate swap). It is only in the latter case that Duncan's special category of "actionable mispredictions" arises. (Plainly, this cuts across the "contract"/"no contract" distinction.)

The difficulty is that Duncan keeps using language which refers to a single person's mental state ("mistake" and "misprediction"), whereas it is elementary contract law that rights depend on what was agreed, rather than on what one party thought they were agreeing to. So, for example, if Duncan were describing the Fibrosa case, he has to say that the parties "mistakenly believed" that war would not break out, or "mispredicted" peace - both of which seem factually doubtful. In fact, we don't care what the parties actually thought about the likelihood of war. The point is that their agreement is only intelligible if we presuppose peace-time conditions, and so may be said to embody an assumption that there would be no war.

If harmony can be attained between the cases involving contracts and the cases which don't, it can only be by using the same concepts for each. "Mistake" doesn't cut it, because we then slide between mistakes made by individuals, and mistaken assumptions implicit in contractual wording. Whereas talk about the "common assumption" their transaction embodies works in both contexts - we can talk of payment of a debt as embodying the assumption that the money was due, without making any unprovable statements about what was going through the parties' minds.

At 17:41 18/10/02 +0100, Duncan Sheehan wrote:

Dear all,

I think my response to Steve is yes, but also no. Perhaps a pithy exposition of how I see mispredictions would help.

A misprediction which becomes apparent, because the belief becomes falsifiable, when the transaction/contract is still executory or partially executed will count. That is I think why frustration operates, as a misprediction that bites when the contract is partially executed. If the prediction became falsifiable only after full execution there would be no relief, and most cases of misprediction on restitution fall into this category. May be I am just repeating myself from my earlier email, but this is the principled reason for treating some mispredictions differently. If the contract is partially executed the misprediction affects what you actually do. If it is fully executed it does not. If Steve is implying there is no principled basis, as I think he is, I must disagree.

The part with which I do agree is where Steve says "The question is not, ultimately, what the parties expected or predicted, but what sort of circumstances their agreement provides for."

True, up to a point. If we take the risk of being mistaken we can have no relief, and Great Peace Shipping confirms this for us. I do not think we have to abandon mistake though. We need a cause of action, and I do not think not having provided for the eventuality provides one. Taking the risk, or providing for the occurrence may bar relief, but we still need the mistake to justify relief in the first place. That said it won't be very often, certainly not if Solle v Butcher really has gone, and we take a rather bold Court of Appeal's word for it.