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LSDefine
Simple English definitions for legal terms
mutual mistake
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A quick definition of mutual mistake:
Mutual mistake is when both parties in 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:
Definition: Mutual mistake refers to a situation in which both parties to a contract misunderstand each other's intent or have a belief that does not correspond to the facts or law. This can result in the contract being voidable.
Examples:
- Two parties enter into a contract for the sale of a painting, but both parties mistakenly believe that the painting is an original when it is actually a replica. This is a mutual mistake that could result in the contract being voided.
- Two parties enter into a contract for the sale of a car, but both parties mistakenly believe that the car has never been in an accident when it has. This is a mutual mistake that could result in the contract being voided.
These examples illustrate how a mutual mistake can occur when both parties have a mistaken belief about a material fact that is important to the contract. In both cases, the contract could be voided because the parties did not have a meeting of the minds due to the mutual mistake.