Unilateral Mistake CASES

In English contract law, a unilateral mistake occurs where only one party is mistaken about a term, the identity of the other party, or the effect of the contract. The general rule is that contracts are judged objectively: if a reasonable person would think the parties agreed on the same terms, the contract stands even if one party was subjectively mistaken. The main exceptions are (i) mistake as to a term that the other party knew (or ought to have known) about, and (ii) certain identity cases where identity is fundamental.

Definition and principles

The law distinguishes between mere mistakes that do not affect formation, and operative unilateral mistakes that prevent agreement or render it void. The key questions are: (1) was the mistake about a term (not just a motive or a quality), or about identity; and (2) did the other party know, or should they reasonably have known, of the mistake at the time of agreement? If so, the objective appearance of agreement gives way: there is no consensus and the contract is void.

Mistake as to a term or price (“snapping up”)

If an offeree knows (or a reasonable person in their position would realise) that the offeror has made an obvious slip as to a term—for example, a price or quantity—they cannot “snap up” the offer and insist on the bargain. There is then no contract because the offeree knew the offeror’s words did not reflect their true intent. By contrast, if the offeree had no reason to suspect an error and the wording is clear, the contract usually stands; the remedy may be rectification only in exceptional, unconscionable cases.

Mistake as to identity

Identity can matter where the offeror’s choice of counterparty is fundamental (for credit, reputation, or regulatory reasons). The law distinguishes:

• Written/distance contracts: if the innocent party intended to contract only with a specific, identified person named in the document (for example, after credit checks), a rogue’s impersonation can render the contract void. Title then does not pass to third parties.
• Face-to-face dealings: the presumption is that you intend to contract with the person physically present. The contract is usually voidable for misrepresentation, not void for mistake. If the rogue sells to an innocent third party before rescission, good title may pass.

Whether identity, as opposed to attributes, was truly of the essence is fact-sensitive. Courts look at documents, checks performed, and whether the named identity was a condition of dealing.

What does not suffice?

• Mistake as to quality or motive: a one-sided mistake about the quality or value of the subject matter is ordinarily not operative. The classic (rare) “fundamental difference” cases are treated under common mistake, not unilateral mistake.
• Careless failure to read: generally binds the signer (caveat subscriptor), save for the narrow defence of non est factum where the document is radically different from what was intended and the signer was not careless.

Relationship to misrepresentation and rectification

Unilateral mistake addresses formation (was there a contract at all?). Misrepresentation makes a contract voidable and may yield rescission and/or damages. Rectification can correct a written instrument where one party was mistaken and the other acted unconscionably in letting the mistake stand, but it does not create a new bargain.

Effect and remedies

• Void for operative unilateral mistake: no contract; the parties are restored (as far as possible) to their pre-contract positions. Third parties generally cannot take good title from a void contract.
• Voidable for misrepresentation (common in face-to-face identity cases): valid until rescinded; rights of innocent third parties may intervene if the rogue transfers goods before rescission.
• Rectification or refusal of specific performance: equity may correct obvious slips or refuse to enforce a bargain the defendant knew the other never intended to make.

Common examples

• Price input error known to the buyer: a buyer realises a decimal point error on a bespoke quote and rushes to accept; no binding contract because the buyer knew of the mistake in a term.
• Rogue identity by post/online: a seller extends credit only because they believe they are dealing with a named, creditworthy company verified in writing; the contract may be void for mistake as to identity.
• Market-value misjudgment: a seller undervalues goods due to their own faulty research; absent knowledge by the buyer or misrepresentation, the contract stands.

Practical importance

For claimants seeking to avoid a contract, identify precisely the mistaken term or the centrality of identity, and show the other party’s knowledge (or constructive knowledge) at the moment of assent. Preserve drafts, emails, logs and credit-check records. For defendants, emphasise objective agreement, lack of knowledge, and alternative routes (misrepresentation/rectification) if appropriate. In transactions, reduce risk with clear confirmations, “subject to contract” wording during checks, and automated flags for pricing anomalies.

See also: Common mistake; Misrepresentation; Rectification; Non est factum; Objective agreement; Identity fraud; Title and third-party rights.