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Simple English definitions for legal terms
Mutual Material Mistake
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A quick definition of Mutual Material Mistake:
Mutual Material Mistake: When two people make a contract, sometimes they both make a big mistake about something important in the contract. This mistake has to be about something really important, not just a small detail. And both people have to make the same mistake. If this happens, one person can say that the contract is not valid because of the mistake.
A more thorough explanation:
Mutual Material Mistake is a defense used in contract law to argue that a contract is invalid.
To use this defense, a party must argue that:
- There was a mistake
- The mistake must be material, meaning it must concern substantive characteristics of the subject of the contract
- The mistake was mutual, meaning both parties had the same mistaken belief
Two parties, A and B, enter into a contract for the sale of a car. Both parties believe that the car has never been in an accident. However, after the contract is signed, they discover that the car was in fact in an accident and has significant damage.
In this case, both parties had the same mistaken belief about the condition of the car, which was material to the contract. Therefore, either party can use the defense of mutual material mistake to argue that the contract is invalid.