FIN 240 Lecture Notes - Lecture 17: Undue Influence, Rescission, Fiduciary
Document Summary
Lack of voluntary consent can be used as a defense to the contract"s enforceability. Mistake of fact occurs when the parties entered into a contract with different understandings of one or more material facts relating to the contract"s performance. Only a mistake of fact makes a contract voidable. Unilateral mistakes of fact - mistake made by only one of the parties that does not generally give the mistaken party any right to relief from the contract. Other party to the contract knows or should have known that a mistake of fact was made. Error was due to an inadvertent, substantial mathematical mistake and not gross negligence. Bilateral (mutual) mistakes of fact - mistake by both contracting parties about one or more material facts generally entitles either party to rescind. Either party can rescind the contract when both parties are mistaken about the same material fact.
