Court case[1932] AC 161

Lever Brothers employed Bell and Snelling as chairman and vice-chairman of a subsidiary, the Niger Company. When the subsidiary was merged, Lever agreed to pay them 30,000 and 20,000 pounds as compensation for the early termination of their service contracts. Lever later discovered that both men had secretly traded on their own account in breach of duty, which would have entitled Lever to dismiss them without any compensation. Lever sued to recover the money, alleging fraud and, alternatively, mistake.

The jury found no fraud. By a majority of three to two the House of Lords held that the agreements were not void. Lord Atkin said a mistake will not affect assent unless it is the mistake of both parties and is as to the existence of some quality which makes the thing without the quality "essentially different from the thing as it was believed to be". Lever got what it bargained for, a release of the service contracts; the fact that it could have obtained the release for nothing went to the value of the bargain, not to its identity.