Unilateral Mistake

A Unilateral Mistake is a contract agreement mistake where only one party to a contract is mistaken about a material fact, and the other party knows or should know of this mistake.

• Context:
  • It can occur when one party misunderstands or misinterprets a critical term of the contract.
  • It can lead to contract rescission if the non-mistaken party knew of and took advantage of the mistake.
  • It can involve mistakes regarding subject matter, identity, or terms of the contract.
  • It can require proof that the mistake was material and that the non-mistaken party acted in bad faith or had knowledge of the error.
  • It can result in remedies such as contract reformation or cancellation to ensure fairness.
• Example(s):
  • Mistake as to Subject Matter: A seller lists an antique for $1,000 instead of $10,000 due to a typographical error, and the buyer knowingly exploits this error.
  • Mistake as to Identity: A company mistakenly contracts with an unintended party due to misrepresentation.
  • The case of Hartog v Colin & Shields, where the seller mistakenly offered goods at a price per pound instead of per piece, and the buyer knew of the mistake.
  • A situation where a contractor submits a bid with a clerical error significantly underpricing the work, and the client is aware of the likely mistake.
  • ...
• Counter-Example(s):
  • Mutual Mistake, where both parties share an erroneous belief about a fact.
  • Fraud, which involves intentional deception rather than an unintentional error by one party.
  • Common Mistakes, where both parties share the same incorrect assumption, but it does not prevent agreement.
  • ...
• See: Mutual Mistake, Legal Agreement Capacity, Contract Rescission, Contract Reformation.

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References

2025a

• (Mixon, 2025) ⇒ Bryan Mixon (2025). "Unilateral Mistake in Contracts Law: Comprehensive Insights". In: AmazeLaw.
  • QUOTE: Unilateral Mistake Defined: Unilateral mistake in contracts law refers to a situation in which one party to a contract makes an error or misunderstanding regarding a crucial aspect of the contract, and the other party is aware of this mistake. In such cases, the party who made the mistake may seek relief from the contract, typically through the legal doctrine of mutual mistake.

2025b

• (LawTeacher.net, 2025) ⇒ LawTeacher.net. (2025). "Mistake in Contract Law". In: LawTeacher.net.
  • QUOTE: This form of mistake applies when only one of the parties to the contract is mistaken as to part of the contract. Unilateral mistake is limited, but will usually operate in circumstances where one party is mistaken as to part of the contract, and the other party is aware of this fact and takes advantages of it.
    • Unilateral mistake as to the terms of the contract

      The three requirements that will render a contract void for unilateral mistake in relation to the terms of a contract are:

      • One party is mistaken as to a term of the contract, and would not have entered the contract but for this mistake
      • The mistake is known or reasonably ought to be known to the other party
      • The mistaken party is not at fault
    • Requirement one is fairly straightforward, the courts will consider whether, if the mistaken party had known the real truth as to their mistake, they still would have entered into the contract. If they would have, this cannot amount to an actionable claim for mistake.

2022

• (Cueto, 2022) ⇒ Santiago A. Ceuto (2022). "Mutual, Common & Unilateral Mistake In Contract Law (With Examples)". In: Legal Department Solutions, Ceuto Law Group, P.L.
  • QUOTE: Our unilateral mistake definition: A unilateral mistake is a mistaken belief made by one party in a contract.

    If only one person is making a mistake of law or mistake of fact, the mistake is a unilateral mistake. This type of mistake is the most common of the three mistakes.

    A unilateral mistake could void a contract when the other party has an unconscionable advantage in a contract because they fully understand the terms outlined in the document.

    Unilateral mistake contract law provides two ways to fix a unilateral mistake in contracts. Either it can be fixed by contract reformation so that both parties fully understand the terms or both parties can cancel the contract altogether.

    • Unilateral Mistake Example
      • One example of unilateral mistake contracts would be contracts that use terms with double meaning. If a contract used the term "adult" without specifying an age, a party member who might be from a foreign country may enter the contract thinking of a different age than the original author intended. An adult's age can range anywhere from 15 to 21 depending on where you are in the world.

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