Essay on Mutual Mistake

908 WordsOct 24, 20144 Pages
Abstract Mutual Mistake of fact is when both parties of a contract make an assumption of fact when contract is formed and signed. The mistake must significantly change what you have to do under the contract, almost to the point where it’s an entirely different agreement. Although, if you knew there was a strong chance or probability of mistake at the time the contract was signed, you may have assumed the risk of that mistake. You therefore cannot use the mutual mistake defense. Not all cases of Mutual Mistake are strong enough to void a contract. Contract Law: Mistake of Fact In the given case: Josh Hartly was interested in purchasing a new car and visits his local auto dealer. In the course of his negotiations, he tells the…show more content…
(LaMance, 2011) It is absolutely agreeable that in these types of situations that a contract be deemed void from a mutual mistake of fact. If, for example, someone was contacted to dig a whole in someone’s backyard but after the contract had been signed both parties had found out that under a thin layer of dirt was solid rock, a mutual mistake of fact could make the contract void since neither party knew of the rock under the surface. If a mutual mistake defense was not possible then the person contracted to dig the whole would have to dig the whole under any circumstance and run the risk of destroying their equipment and/or having to spend more money for equipment capable of doing the job. In the case of John Harlty neither party acted unethically. Though one could argue that the salesperson should of known that the manufacturer was to stop production on cars with either a 3.2 liter and 3.9 liter V6 engine and begin production on a new model with a 3.5 liter engine before trying to sell a discontinued car to a customer. This would make it a unilateral mistake of fact because the salesperson had a reason to know of the mistake and it was his fault that led to the mistake (Emanuel, 2011). But, on the other hand, buying a new car is a pretty big deal and the potential customer should have done their own research and found out that a certain model of car was to be changed in
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