McRae v Commonwealth Disposals Commission
Encyclopedia
McRae v Commonwealth Disposals Commission [1951] HCA 79 is an Australian contract law
Australian contract law
Australian contract law is based on the inherited English contract law, with specific statutory modifications of principles in some areas. Australian law has developed through the decisions of Australian courts, especially since the 1980s, and various pieces of legislation passed by the Parliament...

 case, relevant for English contract law
English contract law
English contract law is a body of law regulating contracts in England and Wales. With its roots in the lex mercatoria and the activism of the judiciary during the industrial revolution, it shares a heritage with countries across the Commonwealth , and the United States...

, concerning the common mistake about the possibility of performing an agreement.

Facts

The Commonwealth Disposals Commission sold McRae a shipwreck of a tanker on the Jourmaund Reef, supposedly containing oil. No tanker ever existed. CDC argued there was no liability for breach of contract because it was void given the subject matter did not exist.

Judgment

High Court of Australia held that McRae succeeded in damages for breach of contract. They rejected the contract was void because CDC had promised the tanker did exist. Courturier v Hastie
Courturier v Hastie
Courturier v Hastie [1856] is an English contract law case, concerning common mistake between two contracting parties about the possibility of performance of an agreement.-Facts:...

was distinguished because there the parties had both shared the assumption the corn existed, but here CDC had actually promised the tanker existed and therefore had assumed the risk that it did not.

See also

  • English contract law
    English contract law
    English contract law is a body of law regulating contracts in England and Wales. With its roots in the lex mercatoria and the activism of the judiciary during the industrial revolution, it shares a heritage with countries across the Commonwealth , and the United States...

  • Frustration in English law
    Frustration in English law
    Frustration in English law is an English contract law doctrine, which acts as a device to set aside contracts where an unforeseen event either renders contractual obligations impossible, or radically changes the party's principal purpose for entering into the contract...

  • Cooper v Phibbs [1867] UKHL 1, (1867) LR 2 HL 149
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