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Unformatted text preview: yacht to Keisha for $1 million, and unknown to either at the time the yacht has already sunk to the bottom of the slip where it was moored, the contract is voidable.
A classic case involving mutual mistake had a seller contracting to sell bales of cotton to a buyer. The contract seemed very specific, calling for the 125 bales of cotton to be shipped from Bombay, India, to Liverpool, England, on a ship called Peerless. How could there be a misunderstanding? It turns out there were two ships called Peerless, both carrying Surat cotton, both sailing from Bombay to Liverpool. One was scheduled to arrive in October, and the other in December. The buyer was thinking of the October ship, and when his cargo isn’t on the Peerless, he sues for breach. But all along the seller had the December ship in mind. The parties never truly agreed on the terms, because of their factual mistake. Thus the contract is voided by the seller, and the buyer is out of luck.
Note that a mistake in value is not a mistake of fact...
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