Mistake, Misrepresentation, and Frustration

Abstract

This chapter focuses on mistake, which can be described as an erroneous belief of parties that wish to enter into a contract. It explains that mistakes determine whether a contract comes into existence at all or whether a written contract is to be interpreted in a manner that appears to run contrary to its text. It also discusses the distinction of mistakes between mistakes as to the terms of the contract or the identity of the contracting parties and mistakes as to the factual and legal assumptions that underlie the contract. This chapter elaborates that mistakes as to terms or identity may give rise to a wide range of legal consequences, depending on the nature of the mistake. It clarifies that a mistake as to the facts or law that underlie an agreement can only affect an apparent contract in a very narrow set of circumstances.