Mutual and Unilateral Mistake in Contract law author: drs63 created Date: 12/7/2016 9:13:37 AM.

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All businesses inherently deal with contracts, even if they are unwritten, as with many transactions involving goods or services. Since a contract is a legally binding agreement, and even an honest contractual mistake can cause serious problems, it is crucial that small business owners have at least a basic understanding of contract law.

Given the difficulty in reforming written contracts, it is vital to ensure that important contracts are mistake-free. Most drafting errors can be avoided by following these three tips: First, be cautious when creating a new contract from an old template. Sometimes stock language conflicts with a term agreed to by the parties.

Contract law regulates the obligations established by agreement, whether express or implied, between private parties in the United States. The law of contracts varies from state to state; there is nationwide federal contract law in certain areas, such as contracts entered into pursuant to Federal Reclamation Law.

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A mutual mistake is a common misunderstanding between the parties entering into a contract as to the intentions of the other party or a material fact in relation to the contract. A mutual mistake will render the contract voidable: if the mistake goes to the heart of the heart of the contract, the contract is void.