Defenses to Contract Formation

Question 1

Unilateral Mistake/Define

Answer 1

A unilateral mistake occurs when one of the parties is mistaken about existing facts relating to the contract.

Question 2

Unilateral Mistake/Defense

Answer 2

A unilateral mistake will prevent contract formation, but only if non-mistaken party knew or had reason to know of the mistake.

Question 3

Mutual Mistake/Define

Answer 3

A mutual mistake occurs when both parties are mistaken about existing facts relating to the contract.

Question 4

Mutual Mistake/Defense

Answer 4

When a mutual mistake occurs, the contract is voidable by the affected party if the mistake concerns a basic assumption on which the contract is made, the mistake is material, and the party seeking avoidance did not assume the risk.