What Is The Appropriate Remedy When A Court Concludes That There Has Been A Mutual Mistake Of Material Fact?

An innocent misrepresentation results, in essence, in a mutual mistake of fact. Therefore, the only remedy to an injured party is generally

rescission of the contract

.

What remedy is available in the case of misrepresentation?

Depending on the nature of the case, remedies for fraudulent misrepresentation can include

rescission of the contract and damages

. Rescission of the contract is the most common remedy, since fraudulent misrepresentation renders it voidable (as opposed to simply “void”).

What happens if there is a mutual mistake in a contract?

A mutual mistake occurs when

the parties to a contract are both mistaken about the same material fact within their contract

. They are at cross-purposes. There is a meeting of the minds, but the parties are mistaken. Hence the contract is voidable.

When there is a mutual mistake of a material fact?

A mutual mistake occurs when

the parties to a contract are both mistaken about the same material fact within their contract

. They are at cross purposes. There is a meeting of the minds, but the parties are mistaken. Hence the contract is voidable.

What is an example of a mutual mistake?

The sales slip notes that

the carpet purchased

is navy. When, upon examining the carpet in daylight, the customer discovers that it is black, not navy as he thought when he bought it, a mutual mistake would have occurred, since both the seller and buyer were in error concerning the correct color of the carpet sold.

Which of the following is true when there is a mutual mistake in a contract?

Which of the following is true when there is a mutual mistake in a contract?

When both parties to a contract are mistaken about either a current or a past material fact, only the offeror can rescind the contract.

What are the 3 types of misrepresentation?

There are three types of misrepresentations—

innocent misrepresentation, negligent misrepresentation, and fraudulent misrepresentation

—all of which have varying remedies.

How do you prove misrepresentation?

1. A representation was made. …
2. The claim was false. …
3. The claim was known to be false. …
4. The plaintiff relied on the information. …
5. Made with the intention of influencing the plaintiff. …
6. The plaintiff suffered a material loss.

What is the effect of a negligent misrepresentation?

What is the effect of negligent and fraudulent misrepresentation?

The party can either rescind (cancel) the contract or keep the contract and sue

.

What are the damages for misrepresentation?

If a misrepresentation is fraudulent or negligent, the claimant may claim

both rescission and damages under

s2(1) of the Misrepresentation Act 1967 (the Act). If a misrepresentation is negligent or innocent, the court has the discretion to award rescission or damages in lieu of rescission under s2(2) of the Act.

What is the legal effect of a mutual mistake of value?

In this case, either party may rescind. Mutual Mistake of Value: If, however, the mutual mistake concerns the future market value or some quality of the object of the contract,

the contract can normally be enforced by either party

.

What is the effect of a contract entered into by mistake?

If you discover a mistake in a contract, one consequence may be that

the contract becomes void ab initio

. This means that the court takes the contract as not existing, based on this mistake. Alternatively, it can rule that the parties never lawfully entered into the contract.

How do you prove mutual mistakes?

In order to use the defense of mutual material mistake to argue that formation of the contract was improper, a party

must

argue that: (1) there was a mistake; (2) that the mistake must be material, meaning, that it must concern substantive characteristics of the subject of the contract; and (3) the mistake was mutual, …

What is the difference between common mistake and mutual mistake?

Common mistake (where the mistake is shared by both parties, is fundamental and directly affects the basic definition of what the parties are contracting for). … Mutual mistake (where the parties are at cross-purposes with one another).

What is a material mistake?

A material mistake is

one which goes to the heart of the contract and completely negates consensus

. Consequently, no contract can be said to have existed. In the case of a non-material mistake, a valid contract comes into existence.

Is mistake void or voidable?

According to Section 20, “Where both the parties to an agreement are under a mistake as to a matter of fact essential to the agreement, the

agreement is void

”.