Mistake Flashcards
When can a party void a contract containing a mutual mistake?
(1) the mistake relates to a
basic assumption on which the contract was made, (2) the mistake has a material effect on the agreed-upon exchange, and (3) the adversely affected party does not bear the risk of
the mistake.
When can a party void a contract containing a unilateral mistake?
The requirements for the mistaken party to void a contract for unilateral
mistake are the same as those to void a contract for mutual mistake, except that in a case
of unilateral mistake, at least one of three additional requirements must be satisfied: (1) the mistake is such that enforcing the contract against the mistaken party would be
unconscionable, (2) the other party knew or had reason to know of the mistake, or (3) the
mistake is the other party’s fault.
Stare v. Tate
During separation of assets following divorce, attorney improperly calculated value of assets. Other party knew he miscalculated, but didn’t disclosed. Court held that contract must be reformed.
