Question

Which of the following would allow a court to invalidate a contract on the grounds of unilateral mistake? (Check ALL that apply)

a. Both parties made a mistake about a material fact, and they knew or had reason to know about the mistake.
b. One party made a mistake about a material fact, and the other party knew or had reason to know about the mistake.
c. The mistake was caused by a clerical error that was accidental and did not result from gross negligence.
d. The mistake was so serious that the contract is unconscionable, that is, so unreasonable that it is outrageous.

Answer 1

b. One party made a mistake about a material fact, and the other party knew or had reason to know about the mistake.

d. The mistake was so serious that the contract is unconscionable, that is, so unreasonable that it is outrageous.

Step-by-step explanation:

Both of these scenarios would allow a court to invalidate a contract on the grounds of unilateral mistake. In option (b), if one party was aware of the other party's mistake but did not correct it, the court may find that the contract was entered into unfairly and therefore unenforceable. In option (d), if the mistake was so serious that it would be unconscionable to enforce the contract, a court may invalidate it. Option (a) would not apply to unilateral mistake, as it requires both parties to make a mistake, and option (c) only applies to mistakes caused by clerical errors.