mistake

Question 1

Mistake Definition

Answer 1

Belief not in accord with the facts
Facts must exist at the time of the contract
Prediction of future events = NOT A FACT
NOT A BELIEF OR OPINOIN.

Question 2

Party bearing the risk of the mistake

Answer 2

• Allocated by the Contract
• Party aware of Party’s Limited Knowledge regarding facts, but treats knowledge as sufficient.
• Allocated by Court as Reasonable under the circumstances.

Question 3

POLICIES

Answer 3

Risk Shifting Function of COntract Law (Protection of Reasonable Expectations)

vs.
Individual Consent

Question 4

Mistake (elements):

Answer 4

Basic Assumption = Fundamental
Upon which the contract was made (Frustrates intended use).
Materially Affects Performance
Contract Voidable unless party bears the risk of the Mistake

Question 5

Unilateral Mistake

Answer 5

• Mistake by one party to a contract

- Normally Relief is not granted when only one party makes a mistake.

Question 6

Rescission (UNILATERAL MISTAKE)

Answer 6

BASIC ASSUMPTION
MATERIAL EFFECT ON CONTRACT
AND
1) Effect of Mistake is such that enforcement would be unconscionable = severe enough to cause subtantial loss,
OR
2) Other party had reason to know of mistake or mistaken party’s fault caused mistake

Question 7

Rescission (Type of Error Made)

MISTAKE IN FACT or MISTAKE IN JUDGEMENT

Answer 7

Rescission is permitted for clerical errors or other MISTAKES IN FACT
Not for Mistakes in JUDGEMENT = Incompetence.