Which of the following constitutes a mutual mistake of a material fact?
A) Martha selling her house to Graham and hiding the fact that its first floor is damaged
B) Martha and Graham agreeing on the sale of a house, both referring to different houses
C) Graham buying a house from Martha without asking her details of damages
D) Martha selling Graham an old vase for $20, both of them unaware that it is a valuable antique collectible

Question

Quizplus · Accepted Answer

A mutual mistake of material fact occurs when both parties are mistaken about a key fact regarding the transaction. In this case, Martha and Graham are referring to different houses, which is a material fact central to the transaction. Therefore, it constitutes a mutual mistake of material fact. Option A is an example of fraud, option C is an example of a failure to disclose information, and option D is an example of a unilateral mistake.

Which of the Following Constitutes a Mutual Mistake of a Material