Mistake
Contract Law

Mistake in the law of contract deals with two rather different situations. In the first, the parties are agreed on the terms of the contract but have entered it under a shared and fundamental misapprehension as to the facts.

Cases in this category are now usually referred to as common mistake, for normally the mistake is legally relevant only if both parties have contracted under the same misapprehension. In the second, there is some mistake or misunderstanding between the parties which prevents there being an effective agreement or at least means that there is no agreement on the terms apparently stated. This second category of mistake, which can generally be referred to as "mistake in communication", includes "mutual misunderstanding", where each is mistaken as to the terms intended by the other, and "unilateral mistake", where only one of the parties is mistaken, over the terms of the contract or the identity of the other party.