Question

Consider a contract for the sale of a parcel land from seller S to buyer B at a price of $15,000. After the sale is complete, the local government announces plans to build a highway near the property, which raises its value to $100,000. S sues have the contract invalidated on the grounds of mistake. Suppose it is learned at trial that the land would only have been worth $5,000 if the highway had not been approved. What does this information tell you about S's claim that the mistake was mutual?

Answer 1

S’s claim that mistake was mutual is false.

Step-by-step explanation:

The Seller’s claim that the mistake was mutual is not correct as the seller has incentive to mislead the facts after learning the new information about the property and substantial rise in its value.

The mutual mistake is happens when there is fundamental disagreement about the material aspects of the contract. But that is not the case here as both buyer and seller agreed about the same price of $15,000 and sale of the property is completed before getting the new information, although its worth was only $5000.

Therefore it is not the case of mutual mistake and S’s claim that mistake was mutual is false.