What defines a common mistake in contract law?

A common mistake in contract law is characterized by both parties holding a shared erroneous belief about a fundamental fact of the contract at the time of its formation. This situation creates a unique legal scenario where the contract may be voided because the essential basis upon which the parties entered the agreement does not exist. For instance, if two parties agree to sell and purchase a specific piece of artwork, but both are mistaken about its authenticity, the shared misbelief undermines the agreement, as the very subject matter of the contract is in dispute.

This definition emphasizes the importance of mutual understanding in contract formation. It illustrates that when both parties operate under the same misconception, the legal system recognizes that an enforceable contract cannot be upheld as the fundamental premise of the agreement is flawed.

In contrast, a situation where one party falsely represents facts pertains to misrepresentation, which is not the same as a common mistake. This distinction is key because misrepresentation can be addressed through remedies focused on correcting the misinformation rather than nullifying the contract altogether.

Additionally, the notion that contracts are never enforced if there is a mistake is overly broad and not accurate, as there are different types of mistakes, and not all will render a contract unenforceable. Lastly, the idea that only verbal