Third party fraud inducing material mistake - Slip Knot Investments 777 (PTY) LTD v Du Toit 2001 4 SA 72 (SCA)

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dc.contributor.author Pretorius, C-J
dc.date.accessioned 2012-09-03T09:03:32Z
dc.date.available 2012-09-03T09:03:32Z
dc.date.issued 2011
dc.identifier.citation Pretorius, C-J. 2011. Third party fraud inducing material mistake - Slip Knot Investments 777 (PTY) LTD v Du Toit 2001 4 SA 72 (SCA). Potchefstroom electronic law journal (PELJ) = Potchefstroomse elektroniese regsblad (PER), 14(7):187-209 [http://www.nwu.ac.za/p-per/index.html] en_US
dc.identifier.issn 1727-3781
dc.identifier.uri http://hdl.handle.net/10394/7196
dc.description.abstract In Slip Knot Investments v Du Toit 2011 4 SA 72 (SCA) the Supreme Court of Appeal had to determine if the material mistake of a contractual party induced by the fraud of an independent third party could sustain a plea of iustus error raised by the mistaken party. The position prior to this decision was uncertain and characterised by inconsistency, mostly occasioned by the application of the iustus error doctrine together with fault. The Supreme Court of Appeal found that in the circumstances the mistaken party was liable, despite the fraud of the third party, on the basis of the reliance theory. The decision is commendable for bringing a measure of certainty to the law of mistake on this point and indicating that the reliance theory (as opposed to the iustus error doctrine) is the appropriate means to resolving such cases. Nevertheless, it is suggested that although the general rule implied by the court's approach is entirely apposite, there may well be exceptional instances where on the basis of relevant policy considerations the reliance theory should not prevail and the mistaken party should be absolved from contractual liability. In this manner reliance, which at first seems reasonable for being induced by the conduct of the contract denier, may upon further reflection be regarded as unreasonable based on the consideration of risk creation at the hand of the contract assertor, for instance. Admitting exceptions in appropriate circumstances would also provide a degree of consonance with earlier case law, where, even if the court's approach was open to theoretical criticism, a court has intuitively felt that liability should not lie. en_US
dc.language.iso en en_US
dc.subject Third-party fraud en_US
dc.subject Material mistake en_US
dc.subject Iustus error doctrine en_US
dc.subject Reliance theory en_US
dc.subject Misrepresentation en_US
dc.subject Reasonable reliance en_US
dc.subject Suretyship en_US
dc.subject Caveat subscriptor en_US
dc.title Third party fraud inducing material mistake - Slip Knot Investments 777 (PTY) LTD v Du Toit 2001 4 SA 72 (SCA) en_US
dc.type Article en_US

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