Mistake

Definition

A legal doctrine under which the formation of a contract may be prevented if a party entered into the contract under a material misfile of fact.

Purpose

The doctrine of mistake is used to address situations where one or both parties entered into a contract based on a fundamental error about a key fact. This can prevent the formation of a valid contract or lead to the contract being voided or reformed.

Examples of Use

• Contract Law: A buyer and seller enter into a contract under the mistaken belief that a painting is an original when it is actually a replica.
• Real Estate: Both parties mistakenly believe a piece of property includes certain rights or easements that it does not.
• Business Agreements: A supplier and manufacturer sign a contract based on incorrect assumptions about the specifications of a product.

Related Terms

• Mutual Mistake: Both parties share the same erroneous belief regarding a fact that is central to the contract.
• Unilateral Mistake: Only one party is mistaken about a material fact, which can sometimes affect the contract's enforceability.
• Misrepresentation: A false statement of fact that induces another party to enter into a contract.

Notes

• Courts consider whether the mistake significantly impacts the contract's purpose or performance.
• Remedies for mistakes can include contract rescission (cancellation) or reformation (modification).
• Legal advice is often necessary to navigate the complexities of contract law and mistake doctrines.