Unilateral Mistake in Contracts: One-Sided Errors
What Is a Unilateral Mistake?
A unilateral mistake occurs when only one party to a contract holds a false belief about a material fact at the time of signing. Unlike a mutual mistake where both parties are wrong, here the other party either knows the truth or is unaware of the error.
When Courts Grant Relief
Courts are generally reluctant to void contracts based on unilateral mistakes, but relief may be available if:
- The other party knew or should have known about the mistake and took advantage of it (sometimes called "snapping up" an offer you know is wrong)
- Enforcing the contract would be unconscionable — the result would be so unfair that it shocks the conscience
- The mistake was a clerical or mathematical error that is clearly apparent from the face of the agreement
- The mistake is material and the mistaken party can be restored to their original position without serious prejudice to the other party
Common Scenarios
- A contractor accidentally omits a line item from a bid, resulting in a price far below market value
- A seller lists a property at $150,000 instead of $1,500,000 due to a decimal error
- An employee misunderstands a key term but the employer's HR representative recognizes the confusion and says nothing
Unilateral vs. Mutual Mistake
The key difference is that mutual mistakes affect both parties equally, while unilateral mistakes burden only one. Courts are more willing to grant rescission for mutual mistakes because neither party is at fault.
Limitations
Courts generally will not grant relief if:
- The mistake resulted from the party's own negligence in failing to review the contract
- The other party relied on the contract terms in good faith and would be harmed by rescission
- The mistaken party had the opportunity to discover the error before signing
When to Consult a Lawyer
Consider consulting an attorney immediately if you discover a significant error in a contract you recently signed, especially if the other party may have been aware of your mistake.
This article is for informational purposes only and does not constitute legal advice. Consult a licensed attorney for guidance specific to your situation.