In short
A mutual mistake about a material fact lets either party cancel (rescind) the contract. A unilateral mistake generally doesn't, unless the other party knew or should have known of it, or it was an obvious clerical or arithmetic error.
Key takeaways
- A mistake about value or quality judgments isn't grounds to cancel.
- Mistakes of law generally aren't grounds either.
- The mistaken fact must be basic to the bargain.
Where it's tested
REG: Business Law: Contracts — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
On June 1, a merchant seller mails an offer to sell goods. On June 3, the seller mails a revocation. On June 4, the buyer mails an acceptance. On June 5, the buyer receives the revocation. Is there a contract?