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Unformatted text preview: One party made a mistake about a material fact; the other party knew or had reason to know of the mistake The mistake was caused by a clerical error that did not result from gross negligence The mistake was so serious that the contract is unconscionable, that is, so unreasonable that is it outrageous o Mutual Mistake: when both parties make a mistake about the facts; either party can rescind the contract. Mutual mistakes must involve all of the following: A basic assumption about the subject matter of the contract A material effect on the agreement An adverse effect on a party who did not agree to bear the risk of mistake at the time of the agreement...
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- Spring '10
- Financial Accounting