What Is the Difference Between a Unilateral Mistake and a Mutual

question 37

Essay

What is the difference between a unilateral mistake and a mutual mistake? Under what circumstances will a court refuse to rescind a contract based on the defense of a "mistake"?

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Definitions:

Deadweight Loss

The loss in social surplus that occurs when a market is not in efficient equilibrium, often due to externalities, taxes, or subsidies.

Underproduction

Refers to the situation in which a country's or firm's output is less than its productive capacity, often leading to shortages and economic inefficiency.

Market

An area or arena in which commercial dealings are conducted.

Price

The investment deemed necessary, expected, or delivered in payment for an item.