Becht, Arno C.

English

Washington University St. Louis: Open Scholarship

Washington University Law Review Volume 1963 Issue 3 January 1963 Review of “Mistake and Unjust Enrichment,” By George E. Palmer Arno C. Becht Washington University School of Law Follow this and additional works at: https://openscholarship.wustl.edu/law_lawreview Recommended Citation Arno C. Becht, Review of “Mistake and Unjust Enrichment,” By George E. Palmer, 1963 WASH. U. L. Q. 395 (1963). Available at: https://openscholarship.wustl.edu/law_lawreview/vol1963/iss3/6 This Book Review is brought to you for free and open access by the Law School at Washington University Open Scholarship. It has been accepted for inclusion in Washington University Law Review by an authorized administrator of Washington University Open Scholarship. For more information, please contact digital@wumail.wustl.edu. BOOK REVIEWMISTAKE AND UNJUST ENRICHMENT. By George E. Palmer. Co-lumbus: Ohio State University Press, 1962. Pp. 114. $3.75.This book is a reprint of a series of lectures delivered at the OhioState University Law Forum, and is confined to "mistake arising inconnection with agreements or attempted agreements."' It is dividedinto three parts, in the first of which the author undertakes, withinthe limits of his subject, a fundamental classification of the mistakecases. The other two parts are detailed discussions of the worst prob-lems, Part II of mistake in assumptions and Part III of the distinctionbetween unilateral and mutual mistakes.The book, though very clearly written, deals with such a variety ofproblems that I can only undertake to give a general idea of thecontents. In Part I the author states that a scheme of classificationmust use two viewpoints: "one concentrates on the relationship ofthe mistake to the transaction, the other upon its possible legal effecton the transaction. The two factors interact and a workable systemshould take both into account."2 He then isolates four classes of mis-take cases: (1) "misunderstanding," which bears on the issue whethera contract was made; (2) mistake in integration, in which a writingdoes not correctly state the agreement of the parties; (3) mistake inassumptions, when one party or both falsely assume something thatinduces him or them to make a contract; and (4) mistake in per-formance, when one party renders a benefit to the other, falsely think-ing that it is his duty under a contract. In his ensuing discussion ofthese categories the author constantly deals both with existing doc-trine and appropriate policy. For example, the fundamental differ-ence between mistake in assumption and mistake in performance isthat the latter can be corrected without encountering "the policiesfavoring enforcement of contract." In cases of "misunderstanding,"of a contract, though, in the author's opinion, he should sometimesreceive relief even when there is a contract. A mistake in assumptionmay be ground for rescission if one party has an unanticipated gainfrom it because the usual policy supporting contracts does not operatenormally in such a case. Reformation for a mistake in integrationactually carries out the policies for enforcement of contracts. Mistakein performance (rendering a performance thinking that it is required1. P. 4. [AHl citations are to PALMER, MISTAKE AND UNJUST ENRICHMENT(1962)].2. P. 5.3. P. 8.Washington University Open ScholarshipWASHINGTON UNIVERSITY LAW QUARTERLYby contract when it is not) has not, the author says, been recognizedas a category in Anglo-American jurisdictions, though restitution isften given for it. The failure to adopt it has caused confusion be-tween cases in which the defendant's expectations are disappointed, ifrelief is given, with those in which they are not. E.g., mistaken over-payment of a note (mistake in performance) does not disappoint thepayee's expectations, which are limited to the amount actually due.Though the normal remedy in such cases is a common count at law,they bear a startling resemblance to mistakes in integration, for whichthe remedy is reformation in equity. Thus, the policy supportingcontract-enforcement goes against relief for mistake in assumptions,but favors relief for mistakes in integration and performance. Part Iends with a warning against over-rigid classification:There should be considerable flexibility of remedy throughoutthe law of mistake, and this is especially true in the borderlinecases that do not fit comfortably into a single category. The at-tempt in this chapter to identify some of the principal categor-ies should not interfere with this flexibility; on the contrary, Iwould hope that it might aid in a nicer shaping of judgments tomeet the needs of whatever case is a [t] hand. 4Part II is an examination of the doctrines and policies applying tomistakes in assumption. The tension between the policy for enforcingcontracts and the need for relief is expressed in the rule that themistake, to justify relief, must be "basic." The author believes thatthe factors to be used in deciding whether a mistake is basic are "theway it influenced the formation of the contract,"5 and its effect "onthe economic equivalence of the agreed exchange."6 Unjust enrich-ment, in the sense of "lack of economic equivalence, attributable to themistake,' 7 is "the idea that brings most of the cases together.",, Thecourts, in an effort to make the term "basic" more concrete, havedeveloped two rules: that "relief will be given for mistake as toexistence or identity, but not for mistake as to quality, attributes, or'value,"9 and that "relief will be given for intrinsic but not for ex-trinsic mistake." 10 There follows a lengthy critique of these rules,showing, with illustrations, that they are, in the main, inadequate.The rule tfhat relief will be given for a mistake in identity does, theauthor concludes, make it less likely that the courts will require unjust4. P. 32.5. P. 37.6. Ibid.7. P. 38.8. Ibid.9. P. 39.10. Ibid.https://openscholarship.wustl.edu/law_lawreview/vol1963/iss3/6BOOK REVIEWenrichment as a condition of relief in such cases, and more likely thatthat: "On the whole, the chance of upsetting a contract increases asthey will give relief for unilateral mistake. The author's opinion isthe error approaches the terms and decreases as it moves away fromthe terms into the context in which they were formulated." '11 There isan illuminating discussion of this principle, too long to summarize,which ends with the following paragraph:There is no simple formula for testing relievable mistake. Forthe most part relief is given only if the mistake produced an un-expected gain to one party, whose claim to retain it finds less thanfull support in the protection of his contract expectations. If tothis there can be added an understanding of the parties thatlooked toward a quite different exchange of values, the reasonsfor permitting enforcement or retention of the unexpected gainbecome even less persuasive. This may require searching theterms of the contract and the area of understanding that in-fluenced the making of the contract on those terms. The casefor relief is strengthened when the terms and context point to aparticular fact as a central element in or underlying the arrange-ment. But at the critical point of decision there is no substitutefor what Holmes once described as "judgment and tact." 2Part II ends with closely reasoned and well-illustrated discussions ofthe bearing of risk analysis upon mistake in assumptions, and of theeffect of change of position.Part III is a complicated discussion of the distinction between uni-lateral and mutual mistakes. The author offers these definitions:Where there is a mistake as to some matter relevant to a two-party transaction, it will be regarded as unilateral if only oneparty was mistaken as to that matter; whereas if both were mis-taken in the same way as to the same matter, it will be calledmutual. This is accepted usage in this country... 1 3It follows that in many unilateral mistakes "there will in fact bemistake on each side, although not the same mistake,"' 4 and that uni-lateral mistake "covers a considerable variety of situations, each ofwhich needs to be evaluated in its own terms."' 5 Recurring to thecategories defined in Part I, the author concludes that the distinctionhas no function in cases of mistake in performance and integration,and that it is "inappropriate"' 6 for some cases of "misunderstanding"and "oversimplified"' 7 for others. The discussion of mistake in as-11. P. 46.12. P. 53.13. P. 68.14. Ibid.15. P. 70.16. P. 79.17. P. 80.Washington University Open ScholarshipWASHINGTON UNIVERSITY LAW QUARTERLYsumptions is long and complex. The author's conclusions are partlysummarized in the following passage:The general conclusion suggested is that the distinction be-tween unilateral and mutual mistake in assumptions is sometimesimportant, but for the most part the problems need to be framedin different terms. Certainly it will not do to limit relief to mu-tual mistake. This would have shortcomings of the same order aswould a strict insistence that contract be limited to an actualmeeting of the minds.18The next two paragraphs suggest further considerations, one that"mutual mistake provides a useful point of departure,"'1 and theother that "Overhanging all problems of mistake ... is the element ofenrichment. '2oThis survey gives only the vaguest and most general notion of whatthe book contains. I have not even referred to the discussions of theRestatement, of the relations between mistake and breach of warrantyor the relations between mistake and impossibility and frustration,and I could list many other specific problems which I have omitted.Perhaps the survey does show how well the study is integrated. Inaddition, three qualities of the book stand out. First, there is theauthor's constant preoccupation with the problem of policy, of thecriteria for determining what results are desirable and why. Second,the discussion centers throughout upon concrete situations and illus-trative decisions, so that the abstractions I have summarized orquoted are actually made very concrete. Third, the reasoning, thediscrimination between variant cases, is always very close. I must addthat the book is very well written and as easy to follow as its un-commonly troublesome subject matter permits.It is the usual fate of a monograph like this to be read by teachers,perhaps recommended or assigned to students, and ultimately for-gotten. That this book has a real value for students and teachers goeswithout saying, but it deserves a wider audience, and I hope it finds it.Restitution is less understood than the other two groups of remediesin Anglo-American law, torts and contracts, and no part of it, Ithink, is less understood than mistake. A lawyer is apt to be familiarwith contemporary judgments about policy in a field if he has any-thing to do with it at all, but a mistake dislocates the normal policies.It may even reverse them. This is a serious problem, but it is only thebeginning. Mistake cases are hard to find by the use of the usual re-search tools, and when the lawyer finally has one that he might beable to use, he falls into a nest of conceptions-mistake in integration,18. P. 96.19. Ibid.20. Ibid.https://openscholarship.wustl.edu/law_lawreview/vol1963/iss3/6BOOK REVIEWmistake in assumption, unilateral mistake, mutual mistake-that arenot clearly or even consistently defined, and whose legal consequencesare not clear. Professor Palmer's book is aimed at this trouble zone.It provides practicable definitions of meanings and of legal conse-quences, a theoretical framework suitable for general application inanalysis, and an examination of policy considerations and their appro-priate limits. The book is so unpretentious in size (about 96 pagesof text and 16 more of footnotes) that it would be easy to overlook itsvalue. I do not know any book that will yield as much enlightenmentfor equivalent reading-time. Its brevity is one of its greatest merits;the lawyer, seeking a general acquaintance with the subject, will findthat he can get it quickly. More than this, he will get at least thefundamental bases for critical evaluation of the cases that he willlater read in the reports. And in this field the lawyer, I think, needsthese advantages more than he needs a case-in-point. In short, Irecommend this study to the attention of judges and lawyers as wellas of teachers, as a much-needed general approach to the law of mis-take, which, if it is applied, will contribute greatly to the ordering ofthe field and its alignment with fundamental policy.ARNO C. BECHTMadill Professor of LawWashington UniversityWashington University Open Scholarshiphttps://openscholarship.wustl.edu/law_lawreview/vol1963/iss3/6

Review of “Mistake and Unjust Enrichment,” By George E. Palmer

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Review of “Mistake and Unjust Enrichment,” By George E. Palmer

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