Contracts
Under New York law, 'mutual mistake' as a basis for rescinding a real estate contract requires that:
AOnly one party made a mistake about the contract terms
BBoth parties shared the same mistaken belief about a material fact at the time of contracting✓ Correct
CThe mistake was caused by fraud by the other party
DThe mistake was about the future value of the property
Explanation
A mutual mistake occurs when both parties to a contract share the same erroneous belief about a material existing fact at the time of contracting. Under New York law, a contract entered into under a mutual mistake of fact may be rescinded if the mistake goes to the essence of the contract. This differs from a unilateral mistake, which generally does not allow rescission.
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