Solle v Butcher [1950] 1 KB 671
Facts
Solle took a lease of a flat from Butcher at an agreed annual rent. Both proceeded on the understanding that changes to the property meant it was outside the relevant rent-control restrictions. That understanding was wrong. Solle later claimed the protection of the legislation and recovery of rent paid above the permitted level. Butcher sought to have the lease set aside because of their shared mistake. The Court of Appeal considered whether equity could grant relief even though the mistake did not make the contract void under the common-law approach.
Legal Issue
Could equity set aside an otherwise valid lease for a fundamental common mistake about rent-control restrictions, and on what terms should relief be granted under the approach then adopted?
Held
The majority permitted the lease to be set aside on terms designed to avoid an unfair result between landlord and tenant. Denning LJ treated equity as having a jurisdiction to rescind a contract for a fundamental shared misapprehension, even where the common law left the agreement valid, provided the claimant for relief was not responsible for the mistake in the relevant sense. Conditions could protect the tenant’s choice whether to remain under a lawful adjusted arrangement or leave. Jenkins LJ dissented. This was the historic decision: its separate equitable common-mistake jurisdiction was subsequently rejected by the Court of Appeal in Great Peace. It must therefore be distinguished from a statement of the current English rule governing mistaken contracts.
⭐ Legal Principle
Historically, Solle recognised a separate equitable power to set aside a contract for fundamental common mistake on appropriate terms, despite validity at common law. Great Peace later rejected that jurisdiction in English contract law. Solle is therefore authority for the former approach and the debate surrounding it.
Significance
Solle remains important for understanding the development of mistake and the attraction of flexible equitable remedies. Its present educational value depends on explaining its later rejection. An essay can compare Denning’s concern for tailored relief with the certainty and allocation-of-risk reasoning associated with Great Peace. A current problem should apply the surviving common-law rules and any distinct doctrine actually engaged, such as misrepresentation or rectification, rather than invoking a general fairness power to rescind a valid bargain.
Common exam questions about this case
What was distinctive about Denning LJ’s approach?
He separated common-law invalidity from an equitable jurisdiction to set aside a valid contract for fundamental shared mistake. Equity could impose terms to protect both parties rather than treating the bargain as automatically void. That flexibility explains the decision’s influence, but the separate jurisdiction was later rejected in Great Peace.
Can a current English-law answer rely on Solle to rescind for common mistake?
It should not rely on the separate equitable jurisdiction rejected by Great Peace. The answer must apply current common-law mistake principles and analyse any other available doctrine on its own requirements. Solle can explain the historical debate, but cannot simply supply a general discretion to release a party from an unfortunate agreement.
Why did the court consider terms attached to rescission?
Setting aside the lease without conditions could itself prejudice one party. The majority’s equitable approach allowed an arrangement addressing occupation and rent rather than a stark void-or-valid choice. That illustrates the nature of the historical remedy, even though the distinct jurisdiction supporting it is no longer accepted after Great Peace.