Impeaching Contracts: Mistake
Mistake in the “eyes of the law”
We must not confuse a „Legal Mistake‟ with „Mistake‟ in its general more non legal
meaning such as “ I made a mistake in not putting my jacket on” such mistakes in
judgment do not legally justify avoiding ones legal obligations under a contract.
The Law recognizes 2 meanings of Mistake
1) Mistake in the TERMS of a contract.
2) Mistakes in the ASSUMPTION of a Contract.
The law will grant relief for the following Mistakes.
1) Mistakes about the Terms
a) Words used Inadvertently
If a party uses the wrong word inadvertently in stating the terms of a
contract then the contract is void at the option of the party who used the
word wrong- the wrong word must have caused a material misfortune and
b) Errors in Recording an Agreement
Once parties have already reached an agreement and later intend to put the
contract into a formal written contract and find that an error was made in the
Pending if the error is material enough the court it most cases will grant
RECTIFICATION (fix the contract) RARE!!
In order to get rectification you must prove
1) there was a clear complete agreement accomplished with out any ambiguity
2) the parties didn‟t engage in any further negotiation
3) the error in the recording is in fact an error any clear to see was an honest mistake (
if looks fraudulent will not grant rectification )
c) Misunderstanding about the Meanings of Words
When parties both have a misunderstanding of the meaning of a word in a contact.
In some cases both parties are equally reasonable or unreasonable as to the mistake in
the meaning of the word ----- Peerless Boat with Cotton
In this case the courts will set the contract aside because of the mutual mistake BUT if
one party is misunderstood diff outcomes in court. 2) Mistakes Arising from Assumptions
a) Mistakes as to the Existence of the Subject Matter
A mistake made when both parties believe that the subject matter exist when it fact it
does not( fruit gone bad) both parties are unaware of the damages and at the time the
contract was entered into the goods were fine – the courts will set the contract aside. (