In a contract setting, a unilateral mistake refers to instances where only one party is mistaken regarding a word, definition, term, quantity, or other measurement in a contract. This can create legal conflicts, especially where the mistake causes one party to suffer losses in the contract arrangement.
A common type of unilateral mistake is where a party is mistaken regarding the price of a product or service. This can often happen especially in cases where there is a conversion of monetary rates involved (such as in international exchanges). In such cases, it may be necessary to return to the contract document and other forms of evidence to determine what the parties intended regarding the mistaken term.
Some other unilateral mistake examples include:
- Mistakes regarding the quantity of a product to be delivered (especially for large numerical values)
- Misunderstandings of certain trade terms and technical phrases
- Mistakes involving words that have several meanings, pronunciations, or spellings (such as "four" vs. "for")
- Errors regarding the quality or description of a product
The remedy for a unilateral mistake is either reformation (changing the part of the contract where the mistake lies) or rescission (canceling the entire contract). Reformation usually results when only one party knows of the mistake. Rescission occurs where the non-mistaken party actually knows about the other party’s mistake. Thus, rescission may be required in order to prevent the non-mistaken party from taking advantage of the other party.
Contract legal disputes such as those involving a unilateral mistake generally require the help of a qualified contracts lawyer. An experienced business lawyer in your area can help you when it comes to filing a case in court, or requesting a damages award. Your lawyer can also provide professional representation during the actual court hearings.