Mutual Mistake

Mutual mistake excuses contracts when both parties are wrong about something important. Example: both parties think property is 2 acres; it's actually 1 acre. Both mistaken about material fact (acreage). Mutual mistake differs from unilateral mistake (only one party wrong; generally not excusable). Mutual mistake requires: both parties mistaken, about material fact (not law or value), mistake caused transaction to fail, neither party's fault. Courts strictly interpret mutual mistake: parties bear risk of bad assumptions (if one party researches and other doesn't, no mutual mistake). Mistakes about value (paying too much) aren't excusable: 'I thought it was worth $500k, actually worth $300k' isn't mutual mistake. Mutual mistake is powerful but difficult to prove. Applies to: property acreage, condition, ownership status, legal right to use. Understanding mutual mistake: if both parties discover mistake, might be grounds for rescission.