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LSDefine
Simple English definitions for legal terms
bilateral mistake
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A quick definition of bilateral mistake:
Bilateral mistake is when both parties to a contract make a mistake about something important. This mistake can be about the facts or the law. If the mistake is serious enough, the contract may be cancelled. It's like when two friends agree to trade toys, but they both think they're getting something different than what they actually get. If they both made the same mistake, they might decide to cancel the trade and keep their own toys.A more thorough explanation:
Bilateral mistake is a situation in which both parties to a contract make the same mistake. This can happen when they misunderstand each other's intentions or when they have a belief that does not correspond to the facts or law. As a result, the contract may be voidable.
For example, if two people agree to buy and sell a car, but they both mistakenly believe that the car has a working engine, when in fact it does not, this is a bilateral mistake. The contract may be voidable because both parties were mistaken about a material fact that was essential to the agreement.
Another example of bilateral mistake is when two parties agree to a contract, but they have different understandings of a key term. For instance, if a buyer and seller agree to a sale of "widgets," but the buyer believes that the term refers to a specific type of widget, while the seller believes it refers to a different type, this is a bilateral mistake. The contract may be voidable because both parties were mistaken about the meaning of a material term.