Mistake

Educational Disclaimer

• The materials shared are for educational purposes only and should not be regarded as legal or professional advice. Consultation with a qualified professional is necessary for any legal queries.

Mistakes in Contract Law

Types of Mistakes

• Mistake in Assumption: Misunderstandings under which a contract was entered can lead to its voidance. Examples include:

  • Mistaken identity

  • Mistakes concerning the existence or quality of the subject matter

• Mistake in Terms: Refers to errors in the actual terms of the contract.

Categories of Mistakes

• Unilateral Mistake: Only one party is mistaken about a key element of the contract.

• Common Mistake: Both parties are mistaken regarding the same essential fact.

• Mutual Mistake: Each party has a different misunderstanding about the same issue. Courts will usually aim to uphold the reasonable expectations of the involved parties. The mistake needs to be significant for the court to intervene in the contract.

Case Study: CTI v. Harbour

• Facts:

  • CTI supplied construction materials to Harbour.

  • CTI’s billing was poorly managed, leading to uncertainty in amounts owed at the project’s end.

  • A settlement figure of $35,000 was agreed upon.

  • CTI later identified mistakes implying another $20,000 was due.

  • Harbour refused to pay the additional amount, prompting CTI to sue.

• Court Rulings:

  • A contract can be voided if there is:

    1. A mistake on a materially significant fact.

    2. Enforcing the contract would be deemed unfair or unconscionable.

  • In this case, the $35,000 was upheld as it was not deemed