Contracts & ExecutionQuestion 863 of 1605
A mutual mistake of a material fact by both parties at the time of contracting may allow:
a.Automatic tripling of the contract price
b.Rescission of the contract because there was no true meeting of the minds
c.Only punitive damages
d.The contract to continue with no remedy
Explanation
When both parties share a mistaken belief about a basic, material fact at the time of contracting, there may be no true meeting of the minds on the essential terms, and the adversely affected party can often rescind the contract. This restores the parties to their pre-contract positions. Mutual mistake does not trigger punitive damages, does not multiply the price, and does not leave the harmed party without any remedy when the mistake goes to a material fact.
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Sen Lin, PrepPass Founder · Verified against California CSLB Contractor License Law & Business Exam · How we review
Reviewed by Abraham Chen — Licensed California General Contractor (CSLB License #1101856 — verify)