Legal Definitions - unilateral mistake

A unilateral mistake occurs in contract law when only one party to an agreement holds an incorrect belief or misunderstanding about a significant fact related to the contract, while the other party is aware of the correct information or is not mistaken. Generally, a contract is still enforceable despite a unilateral mistake, unless the non-mistaken party knew or should have known about the mistake and unfairly benefited from it, or if the mistake was so severe that enforcing the contract would be extremely unfair.

• Example 1: Construction Bid Error

  A construction company, "BuildRight Inc.," submits a bid for a new office building project. Due to a data entry error, their bid proposal accidentally omits the cost of all plumbing materials, making their total bid significantly lower than intended. The client, "City Developments," reviews the bids and accepts BuildRight Inc.'s offer, unaware of the internal calculation error.

  Explanation: This is a unilateral mistake because only BuildRight Inc. made an error in their understanding of the bid's true cost. City Developments was not mistaken; they simply accepted the offer presented. Unless City Developments knew or should have reasonably known that the bid was too low due to an obvious error, BuildRight Inc. would generally be bound by their submitted bid.

• Example 2: Misunderstood Antique Value

  Sarah is browsing an online marketplace for vintage furniture. She sees a chair listed as "Mid-Century Modern Style" for $500. Sarah mistakenly believes, based on her own research, that the chair is a rare, authentic designer piece from the 1950s worth thousands. The seller, however, knows it's a high-quality reproduction and has accurately described it as "style," not "authentic." Sarah purchases the chair.

  Explanation: This illustrates a unilateral mistake because Sarah is the only party mistaken about the chair's authenticity and value. The seller made no misrepresentation and accurately described the item. Sarah's mistaken belief, not induced by the seller, would typically not allow her to cancel the purchase.

• Example 3: Incorrect Product Specification

  A restaurant owner, Mr. Chen, orders 50 pounds of "Grade A" salmon from his seafood supplier, "Ocean Fresh." Mr. Chen intended to order "Sushi Grade" salmon, which is a higher quality and more expensive product, but he mistakenly wrote "Grade A" on his order form. Ocean Fresh delivers 50 pounds of standard "Grade A" salmon, as specified.

  Explanation: This is a unilateral mistake because Mr. Chen was the only party who misunderstood the specific type of salmon he was ordering. Ocean Fresh accurately fulfilled the order exactly as it was written. Since Ocean Fresh had no reason to know about Mr. Chen's internal mistake regarding the grade, Mr. Chen would generally be obligated to accept and pay for the "Grade A" salmon.