What is a unilateral mistake example?
2 Answers
A unilateral mistake occurs when only one party in a contract is mistaken about a fundamental fact. For example, imagine a seller offers to sell a rare painting, believing it to be an original. The buyer, unaware of this belief, agrees to the purchase at the offered price. If the buyer later discovers that the painting is a replica and the seller genuinely thought it was original, this could be considered a unilateral mistake. The seller might seek to rescind the contract based on their mistaken belief.
A unilateral mistake occurs when only one party in a contract is mistaken about a fundamental fact related to the contract. This mistake typically involves a misunderstanding about a significant aspect of the agreement, which can sometimes affect the enforceability of the contract.
**Example of a Unilateral Mistake:**
Imagine a buyer and a seller are negotiating the sale of a vintage car. The seller mistakenly believes that the car is a rare model worth $50,000, while in reality, it is a common model worth only $10,000. The buyer, however, is aware of the true value of the car and does not correct the seller's mistake. They agree on a sale price of $45,000.
In this scenario, the seller is operating under a unilateral mistake because they are misinformed about the car's value. The mistake affects the fundamental terms of the contract—specifically, the value of the car.
**Legal Implications:**
In many jurisdictions, a unilateral mistake will not necessarily void the contract unless the mistaken party can prove certain conditions, such as:
- The mistake is about a fundamental aspect of the contract.
- The mistake was not due to negligence or lack of due diligence.
- The other party knew or should have known about the mistake and took unfair advantage of it.
If the seller can demonstrate these conditions, they might have a legal basis to seek rescission of the contract or adjustment of the terms.
**Example of a Unilateral Mistake:**
Imagine a buyer and a seller are negotiating the sale of a vintage car. The seller mistakenly believes that the car is a rare model worth $50,000, while in reality, it is a common model worth only $10,000. The buyer, however, is aware of the true value of the car and does not correct the seller's mistake. They agree on a sale price of $45,000.
In this scenario, the seller is operating under a unilateral mistake because they are misinformed about the car's value. The mistake affects the fundamental terms of the contract—specifically, the value of the car.
**Legal Implications:**
In many jurisdictions, a unilateral mistake will not necessarily void the contract unless the mistaken party can prove certain conditions, such as:
- The mistake is about a fundamental aspect of the contract.
- The mistake was not due to negligence or lack of due diligence.
- The other party knew or should have known about the mistake and took unfair advantage of it.
If the seller can demonstrate these conditions, they might have a legal basis to seek rescission of the contract or adjustment of the terms.