Contracts II Class 10: Mistake

These flashcards cover key vocabulary terms related to mistakes in contract law, focusing on mutual and unilateral mistakes, their definitions, elements, and relevant case law.

Mutual Mistake

A mistake of both parties at the time a contract was made about a basic assumption on which the contract was made.

Unilateral Mistake

A mistake made by one party at the time a contract was made regarding a basic assumption.

Rest.2d § 152

The section of the Restatement that defines mutual mistake and its implications.

Rest.2d § 153

The section of the Restatement that defines unilateral mistake and its implications.

Material Effect

An indication that a mistake has resulted in a severe imbalance in the agreed exchange of performances.

Contractual Mistake

A belief at the time of contract formation not in accord with the facts.

Mistake of Fact

An error regarding a factual premise of the contract.

Basic Assumption

An underlying belief that motivated the parties to enter into a contract.

Severe Imbalance

The result of a material effect where one party receives much more than expected.

Typos & Calculation Errors

Mistakes that can affect the validity of a contract due to inaccuracies.

Messerly Case

A case used as an illustration of mutual mistake in contracts.

BMW Case

A case that illustrates unilateral mistake and risk allocation in contract law.

Palpable Errors

Obvious mistakes that the non-mistaken party should have recognized.

Exception of Risk Allocation

Situations where a party bears the risk of a mistake based on an agreement or ignorance.

Unconscionability

The state of being unreasonable or unjust, particularly in contract enforcement.

Element 1 of Mutual Mistake

Both parties must make a mistake of fact during contract formation.

Element 2 of Mutual Mistake

The mistake must pertain to a basic assumption of the contract.

Element 3 of Mutual Mistake

The mistake must have a material effect on the agreed exchange.

Risk Bearing Party

A party who is allocated the risk of a mistake per contract terms.

Sherwood v. Walker

A case illustrating mutual mistake regarding a cow's ability to breed.

A&M Land Dev. Co. v. Miller

A case contrasting Sherwood, addressing material effect and character of consideration.

Unsound Terms

Terms of a contract that may be deemed unfair or disproportionately skewed.

Case Law Analysis

Review of court interpretations and decisions regarding contract mistakes.

Adverse Effect

A negative impact on a party's rights or obligations due to a mistake.

Conscious Ignorance

Being aware of a risk yet choosing to ignore it.

Contract Voidable

The status of a contract that can be declared invalid due to a mistake.

Rescission

The legal term for canceling a contract due to a mistake.

Legal Standards

Criteria established by courts for assessing situations involving mistakes.