A contract mistake may happen when a term, definition, word, or phrase is not clearly understood in the contract. A contract mistake often occurs when a key term or phrase possesses more than one meaning. Common examples of contract mistakes include:

  • Mistakes as to the quantity of an item being sold
  • Errors in terms of the description of an item
  • Mistakes regarding delivery dates, sale prices, and other specific details
  • Mistakes involving the rights and duties of either party

Mistakes can either be unilateral or mutual. A unilateral mistake occurs when only one party knows of the mistake. A mutual mistake occurs when both parties are aware of the mistake and are in disagreement as to the true meaning of a contract term.

How Are Contract Mistakes Remedied?

In most cases, contract mistakes may be remedied in one of two ways:

  1. Rescission allows the parties to cancel the contract and be returned to the position they were at before the agreement was entered into.
  2. Reformation allows the parties to rewrite those portions of the contract affected by the mistaken terms. The choice between rescission and reformation generally depends on the type of contract mistake involved.

Rescission is generally granted in cases involving either a mutual or a unilateral mistake. For mutual mistakes, the mistake has to be a basic, foundational part of the contract agreement in order for rescission to be granted. For unilateral mistakes, some courts require that the non-mistaken party knew about the mistake. Reformation is generally granted in either mutual or unilateral mistakes.

What if I Need to File a Lawsuit Due to a Contract Mistake?

In most contract mistake lawsuits, the written contract will form much of the evidence that is analyzed in court. Courts will usually look to the original writing to determine what the possible meaning of a mistaken term might be. They may also decide to examine other evidence, such as the party’s conduct in light of their understanding of the mistake. Thus, it’s important to consider various aspects of the agreement when filing a lawsuit for a contract mistake.

Do I Need a Lawyer for Assistance with Contract Mistake Issues?

Contracts can often be very complex legal documents. You may need to hire a business lawyer if you suspect that you have a legal issue involving a contract mistake. Your attorney will be able to advise you of the possible options available in your situation. Also, your attorney can provide you with the legal advice that is needed to succeed on your claim.