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Contract Glossary of Terms: Mistake

Contract Glossary of Terms: Mistake

This is a series of posts about contract terms to help you understand your business better. To see previous posts in the series, click these links: Post 1, Post 2

Post 3. Contract Glossary of Terms: Mistake

Mistake is a defense to enforcement of a valid contract. In a bilateral contract (between only two parties) there are 2 types of mistake: (1) mutual mistake; and (2) unilaterial mistake.

Mutual Mistake

A mutual mistake is when both parties are mistaken about some fact in the terms of a contract.


Buyer agrees to buy and Seller agrees to sell a 2,000 square foot commercial building fit for Buyer’s business needs. Both believe the building to be 2,000 square feet. It turns out that the building is only 1,500 square feet. The court will likely not enforce the contract due to mutual mistake. If the court does not find that there was mutual mistake, then the contract will be enforced.

Unilateral Mistake

A unilateral mistake, you may have guessed, is when only one party is mistaken about some fact in the terms of a contract. If there is a unilateral mistake, the contract will be enforced unless the unmistaken party knew (or should have known) about the mistake.


Buyer and Seller agreed to the sale of the 2,000 square foot commercial building. Seller actually knew that the building was only 1,500 square feet. The court will likely allow the mistaken party to rescind the contract, if he wishes. In Florida, the mistaken party may rescind the contract unless the mistake resulted from an inexcusable lack of due care or the other party has so detrimentally relied on the contract that it would be inequitable to order rescission.

If you have any questions about contract mistake or would like advice on drafting your own contracts, contact Boyer Law Firm today.

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