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The agreement of parties may be affected by the fact that one or both of them made a mistake.
A unilateral mistake is a mistake made by one party to the agreement. A mistake that is unknown
to the other party usually does not affect the enforceability of the agreement. A unilateral
mistake regarding a fact does not affect the contract. For example, if a customer orders a water-
resistant coat thinking that this means waterproof, the customer cannot legally get out of the
contract unless the sale was made with some sort of misrepresentation as to the meaning of
those words. An exception to this would be if the seller knew that the buyer misunderstood those
terms, but went ahead and sold the coat anyway.
If both parties to an agreement make the same mistake regarding a key factual matter, the
agreement is void. For example, a contract is void if both parties mistakenly believe that the
contract can be performed when, in fact, it is impossible to perform it. Suppose Smith promises
Jones over lunch to sell Jones an antique car located in Smith’s garage. Assume both parties
believe the automobile is in Smith’s garage. However, the car had been destroyed by fire an hour
before the agreement and Smith had not learned of this. Since this fact was unknown to both
parties, there is a mutual mistake as to the possibility of performing the contract. The agreement
is therefore void.
c. What is the difference among a valid contract, a void contract and a voidable contract?
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a. The agreement of parties is never affected by the fact that one of them made a mistake____
c. A mistake that is unknown to the other party does not affect the enforceability ________
d. The contact is void when both parties make the same mistake over a key factual matter ____
e. A customer can legally get out of the contract when the sale is made with some sort of
misrepresentation ________