The second type of mistake often found in contract law is mistake of fact. These are usually much more insubstantial errors in contract law. In defense law, mistakes of fact can break a case. Common mistakes of law can be incorrectly identifying the proper corporate name or one of the parties to the contract or mistakenly believing that someone has the authority to act on behalf of a corporation when they do not.
Other types of common mistakes of fact could be as simple as misspelling a person’s or a company’s name, using the improper title or making simple addition mistakes in figuring the value of a contract. Most of these types of errors are minor and should the contract come into dispute because of them, the inclination of the court system has been to try to identify the original intent of those involved in the contract dispute and rule as closely to that original intent as possible (“Mistakes of Fact” 2007).
However, even within that framework, mistakes can be sub classified into two different categories, unilateral and mutual. These mistakes, along with common mistakes and mistakes of identity, have a different legal test for determining if they invalidate a contracr. Again, the type of mistake can influence judicial action if the contract is disputed. Unilateral mistakes occur when only one party of the lawsuit is privy to the mistake. In contract law, this can often mean that one party misunderstands the terms of the contract.
For example, a contract for work for hire might state that the artist/employee retains all rights to their work. If the other party, the buyer, does not understand the implications of this, it would be considered a unilateral mistake. If the artist/seller were attempting to exploit the buyer’s lack of knowledge, then the contract could be overturned for this type of mistake. If the artist were acting in good faith and thought the other party understood the terms of the contract, a unilateral mistake would not be sufficient to overturn he contract.