Answer:
A). Both parties make a mistake regarding a material fact.
Step-by-step explanation:
An agreement is demonstrated as a formal decision among two parties after negotiation and mutual approval by both the parties. It is an arrangement that legally binds both the parties upon a specific course of actions to be done in future.
As per the question, an agreement fails to bind when 'both the parties make a mistake regarding material fact' that damages its validity and makes it unenforceable. The ignorance of the valid key elements about the matter of fact makes the agreement invalid. Therefore, it is always advised that an agreement must consider all the key points considering the matter of fact to ensure its legal binding. Thus, option A is the correct answer.