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Mistake of Fact: Definition, Forms & Cases

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  • 0:03 A Look at Mistake of Fact
  • 0:55 Form
  • 1:14 Cases
  • 2:26 Lesson Summary
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Lesson Transcript
Instructor: Jessica Schubert

Jessica is a practicing attorney and has taught law and has a J.D. and LL.M.

This lesson will teach you what constitutes a mistake of fact in the legal realm. You'll review the definition and form of mistakes of fact and then learn of two significant cases which demonstrate mistake of fact.

A Look at Mistake of Fact

Imagine that you want to buy a house with a piece of property from Bob. Bob believes he owns the house plus the adjacent property. Both of you enter into an agreement for you to purchase the property. However, later investigation reveals that while Bob owns the house, he does not own the adjacent property. This is an example of a mistake of fact.

A mistake of fact is a material error in the facts or circumstances surrounding a contract. In addition, the mistake of fact is not made intentionally; it's simply a genuine error. The mistake of fact can make the contract void and can allow parties to escape liability. When both parties make the mistake of fact, the contract will typically be cancelled by the court. However, when there is just one party who makes a mistake, this determination fluctuates, and the decision is made by the court.

Form

The form of a mistake of fact varies. The mistake can occur in numerous ways. Some ways the mistake occurs is by failure to do an investigation or to neglect the critical facts. The key component to a mistake of fact case is that the mistake was unintentional and a material part of the agreement.

Cases

One famous case called Sherwood v. Walker involved mistake of fact. In this 1887 case, two parties entered into agreement for the sale of a cow. Both parties thought that the cow was barren, and therefore, the price of the cow was set. However, it turned out that the cow was pregnant, which meant that the value of the cow would be much higher.

The two parties in the case went to court, and the court decided that this was a mistake a fact. The contract was excused because both parties unknowingly contracted for a barren cow at a lower price than the pregnant cow was worth.

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