What defines a unilateral mistake?

A unilateral mistake occurs when only one party is mistaken about a fundamental aspect of a contract while the other party is aware of the mistake. This situation can lead to potential issues regarding the enforceability of the contract, as the mistaken party may seek to either avoid the contract or have it revised to reflect what they believed to be the true terms based on their misunderstanding.

In the context of contract law, if one party is unaware of the error, while the other party knows about it, the situation is distinctly categorized as unilateral. This concept underscores the importance of knowing and understanding the terms of a contract fully before entering into an agreement.

On the other hand, a case where both parties share the same misunderstanding would be classified as a mutual mistake, which differs significantly from a unilateral mistake. A scenario where there is no mistake means that all parties have accurately understood the terms of the contract, nullifying the possibility of making a claim related to a mistake. Lastly, when one party misrepresents the terms, this falls under the domain of misrepresentation rather than mistake, as it involves false statements rather than a misunderstanding regarding the agreement's terms.