mutual mistake

A mutual mistake between contracting parties takes place when both parties enter a contract with different understandings as to a state of affairs. The court will consider independently what each party reasonably would have thought the other party was intending by the contract.

When the two positions cannot be reconciled, the contract may be held void for mutual mistake.

Usage: The bidder at the auction was under the impression that he was purchasing paper, when the auctioneer was under the impression that plastic was relevant property. As the catalogue for the sale was misleading, the contract was void for mutual mistake.

Related Words: mistake of fact; mistake of law; mutual mistake; unilateral mistake; contract; rectification; non est factum.