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This kind of Mistake in contract occurs where there is no real 'meeting of minds' between the contracting parties, and the contract is therefore void or voidable. This may arise because the parties are at cross purposes, or the contract is too vague to be interpreted. There are three important metas of agreement mistake:
- mistake as to terms of contract; for example, one party may read the terms of the offer as implying something different to what is really being offered;
- mistake as to subject matter; this usually means that the terms are two imprecise to evidence any meeting of minds;
- mistake as to person; this is the only common case. Here one of the parties is mistaken about the identity of the other.
It can be a job for the court to decide whether there really is an agreement mistake, which may void the contract, or one party has merely made an error of judgement and the contract is sound.
In mistake as to person, it is common for one party to make a mistake about the identity of a fraudster. Particular problems arise when a person buys goods, for example, from a fraudster and then sells them (innocently) to someone else. In general, in a true mistake as to identity the contract is void.