A breach of contract in New York happens when a party to a valid contract does not fulfill their obligations under the contract. If a contract outlines what each party must do under the contract and they do not, the other party, called the non-breaching party, can take legal action and file a lawsuit against the breaching party for their losses.
Breaches of contract can occur in different ways, some of which render a contract void and some which simply do not allow for a part of the contract to be fulfilled. Determining the type of breach helps the court determine the amount of damages the breaching party will have to pay.
There are three main ways a breaching party may be held liable for a contract breach, including:
- Anticipatory breach: This category of breach arises when a breaching party informs a non-breaching party that they cannot fulfill the terms of the contract.
- This is also called anticipatory repudiation.
- Minor breach: A minor breach of contract occurs when a party fails to fulfill one small part of the contract.
- In these situations, the entire contract is not invalidated and can still be substantially performed.
- This may also arise if there is a technical error in the contract, such as an incorrect date, price, or other typographical error.
- Material or fundamental breach: This type of breach is so substantial that it cancels the contract because it renders performance under the contract by either of the parties impossible.
There are also other reasons that a contract may be breached, such as:
- If a contract was fraudulent
- If the contract was illegally formed
- When the contract is unconscionable
- If there was a mistake of fact in the terms of the contract
The parties to a contract may include unique conditions that outline when the actions of a party may be considered a breach. In addition, New York laws, as well as the type of contract, can outline other ways the contract may be breached.
For more information on contract breaches in New York State and how to avoid and resolve them, an individual should reach out to a New York lawyer.
What Constitutes a Mistake of Fact in New York Contract Law?
A mistake of fact in contract law arises when there is a mistake in an essential contract term that is essential to the meaning of the contract. For example, if a contract is for the purchase of plates and refers to paper plates.
If one party thinks the contract referred to ceramic plates, this can be considered a mistake of fact. Mistakes of fact are not the same as mistakes of law. A mistake of law arises when one of the parties is mistaken about how a law applies.
In the context of contracts, there are two categories of mistakes of fact, contract mutual mistakes, and contract unilateral mistakes.
Mutual mistake
Mutual mistakes happen when both of the parties are mistaken about the same term.
The mutual mistake defense may be raised by a party who is attempting to avoid their obligations under the contract. This defense provides that both of the parties to a contract relied upon a mistaken assumption when they entered into the contract, making it void.
Mistaken assumptions are facts that both parties believed to be true and the time they signed the contract but, because of the circumstances, are no longer true. As a result of this, a party can no longer perform under the contract as they originally intended.
Unilateral mistake
A unilateral mistake happens when only one of the parties is mistaken about an essential contract term. These different categories of contract mistakes may result in different consequences for the contract.
Unilateral mistakes are mistaken beliefs that are only held by one of the parties to a contract. These are much more common than mutual mistakes. When this arises, the party who does not hold the mistaken belief has an unfair advantage in bargaining power during contract formation.
Unilateral mistakes can arise from any of the provisions or terms that are contained in the contract. The majority of these types of mistakes involve one of the parties wrongly assuming the definition of a work or phrase that is included in the contract.
As previously discussed, a unilateral mistake, in general, involves dates, quantities, prices, and other errors that are associated with the description of services or goods that are the basis of the contract. To find out more information on what specifically constitutes a mistake of fact in New York contract law and how to avoid these issues, it is important to have a legal consultation in New York.
A New York lawyer can help with contract drafting and review to make sure that mistakes of fact can be avoided.
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Are There Any Legal Remedies in New York for Mistake of Fact In Contract Law?
Yes, there are legal remedies in New York for mistakes of fact in contract law. The type of remedy that is available may depend on the type of mistake and the type of contract.
With a mutual mistake of fact, the most common remedy is for a court to declare the contract void. When this occurs, the parties are not bound to the contract terms and neither of the parties are obligated to perform the duties listed in the contract.
With a unilateral mistake, the legal remedy will typically include rescission or reformation. Rescission means the contract is cancelled if the non-mistaken party knew or should have known about the mistake. This is done to prevent the non-mistaken party from taking advantage of the mistaken party.
Reformation means rewriting some of all of the contract terms if the non-mistaken party was not aware of the other party’s mistake. This allows the parties to rewrite the terms of the contract according to the intention of their original understanding.
In certain cases, monetary damages may be awarded when there were significant losses because of the mistake of fact. Typically, however, a plaintiff will be required to choose between an equitable remedy, such as rescission or reformation, and monetary damages.
Do I Need a Lawyer for Help With Mistakes of Fact in Contract Law?
If you have any issues or questions with a mistake of fact in a contract in New York, it is important to consult with a New York contract lawyer. A New York attorney can help you determine what remedies may be available for your claim in addition to what legal rights are available to you under New York law.
It is always best to have your lawyer involved in the contract process early, in order to avoid mistake of fact issues at a later date. It will only take you around 15 minutes to submit your mistake of fact contract question or concern on the LegalMatch website.
Once you have done that, within about a day, you will get responses from LegalMatch member attorneys who are licensed in New York and pre-screened. Whether you are considering entering into a contract or have already entered into a contract, you can use LegalMatch to help you find a New York lawyer in your area who can help you avoid mistakes of fact.
