In California, a breach of contract happens when a party to a valid contract does not fulfill their part of the agreement. If a party to a valid contract does not fulfill their obligations under the contract, the non-breaching party can take legal action and may be able to file a lawsuit against them in court.
Breaches of contract can be partial or complete breaches. In addition, a court can consider whether a breach was minor or substantial. These categorizations help the court determine the type and amount of damages that a breaching party will have to pay the non-breaching party or parties.
There are three main categories of breach of contract that a party may be held liable for, including:
- An anticipatory breach: Anticipatory breach arises when a breaching party informs a non-breaching party that they will not be able to fulfill their obligations under the contract.
- This is also referred to as anticipatory repudiation
- Once the non-breaching party is notified, they can sue for breach of contract
- A minor breach: A minor breach of contract happens when a party to a contract does not fulfill a less important obligation under the contract.
- This means that the entire contract was not violated and may still be substantially performed.
- This type of breach may also happen if the contract has a technical error, such as:
- an incorrect date
- an incorrect price
- a typographical error
- A material or fundamental breach: These types of breaches are the most common grounds for breach of contract claims.
- When this type of breach occurs, the contract is essentially cancelled, as performance by either party is rendered impossible.
There are also other ways in which contracts can be breached, including:
- If the contract is fraudulent
- If the contract was formed illegally
- If the contract is unconscionable
- When there is a mistake of fact in the contract terms
Parties to a contract may also include conditions that are unique to their particular situation. In these cases, it may specify when the actions of a party may be considered a breach.
In addition, the state laws as well as the type of contract may create other ways in which it can be breached. If an individual has any questions about contract drafting and review or breach of contract in California, they should consult with a California lawyer.
What Constitutes a Mistake of Fact in California Contract Law?
Mistakes of fact in contract law arise when one or both of the parties to a contract have a mistake or misunderstanding related to a term that is essential to the meaning of the contract. An example of this would be if the contract provided that cups would be delivered and the contract referred to plastic cups.
If a party believed the contract referred to glass cups, it would be a mistake of fact. In many cases, a mistake of fact can result in a contract being voided.
Categories of mistakes
In general, mistakes of fact fall into one of two categories, contract mutual mistakes and contract unilateral mistakes. Mutual mistakes arise when both of the parties to a contract are mistaken about the same term.
A unilateral mistake, on the other hand, arises when only one of the parties is mistaken about an essential contract term. Depending on the circumstances of the case, different types of mistakes may result in different outcomes for a contract.
Mutual mistake
The defense of mutual mistake can be raised by a contract party who is attempting to avoid their obligation under the contract. This defense provides that both of the parties to the contract relied on the mistaken assumption when they entered into the contract, rendering it void.
A mutual mistake, in other words, is a fact that both parties to the contract believed were true at the time they signed. Because of the circumstances, however, that fact is no longer true.
As a result of this, the party cannot perform the contract as they originally intended. One example would be a contract to dig a pool in a backyard but discovering that just below the ground is solid rock, which makes digging the pool as contracted impossible.
Unilateral mistake
Unilateral mistakes are mistaken beliefs that are held by only one party to a contract. In other words, a unilateral mistake arises when one of the parties misinterprets the meaning of a term or subject matter in a contract.
It is more common for a unilateral mistake to occur than other types of contract mistakes, such as mutual mistakes. When one party to a contract has a mistaken belief, the other party to the contract has an unfair advantage in bargaining power during the contract formation stage.
Unilateral mistakes can be based on any term or provision that is contained in the contract. The majority of these types of mistakes involve one party wrongly assuming an incorrect definition of a word or phrase included in a contract.
Example of mutual versus unilateral mistakes
To better understand the difference between these terms, it may be helpful to examine an example. Suppose parties entered into a contract for the sale of screws.
One of the parties may believe the term screw refers to a certain brand, such as Phillips-head screws, when, in fact, the term screw refers to any standard screw. If only one party to the contract has a mistaken belief about the term screw in the contract, it is considered a unilateral mistake.
If, however, both of the parties to the contract believed the term screw really meant nails, it would be a mutual mistake. This is because both of the parties held the same belief about the term.
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Are There Any Legal Remedies in California For Mistake Of Fact In Contract Law?
When a mutual mistake of fact occurs in a California contract, one common remedy is that the court will declare the contract void. When this occurs, the parties to the contract are not bound to its terms and none of the parties are required to perform their duties under the contract.
When a unilateral mistake occurs, commonly legal remedies include:
- Rescission: This involves cancelling the contract when the non-mistaken party was aware or should have been aware of the mistake.
- This process is meant to prevent the non-mistaken party from taking advantage of the other party to the contract.
- Reformation: This involves rewriting the contract if the non-mistaken party was not aware of the other party’s mistake.
- This allows the parties to revise the terms of the contract to reflect their original understanding of its terms.
In certain cases, monetary damages may be awarded if the mistake of fact resulted in significant losses. Typically, however, a plaintiff must choose between monetary damages and an equitable remedy, such as rescission or reformation.
For more information on the remedies that may be available when there is a mistake of fact in a California contract, it can be helpful to have a legal consultation in California.
Do I Need a Lawyer for Help With Mistakes of Fact in Contract Law?
If you are involved in a California contract and have any issues or questions related to a mistake of fact, it is important to consult with a California contract lawyer. Your attorney can help you determine what remedies may be available for your issue and advise you of your rights and legal options under California contract law.
It can be helpful to consult with a California attorney as early as possible in contract drafting and before signing to help ensure disputes do not arise. You can find a contract lawyer in your area of California quickly and for free on the LegalMatch.com website.
