If the consideration upon which a contract is based was given as a result of a mutual mistake of fact or of law, the contract cannot be enforced.
(Orig. Code 1863, § 2707; Code 1868, § 2701; Code 1873, § 2743; Code 1882, § 2743; Civil Code 1895, § 3660; Civil Code 1910, § 4245; Code 1933, § 20-308.)
Cross references.- Pleading of mistake as a defense, § 9-11-9.
Equitable principles regarding accident and mistake generally, § 23-2-20 et seq.
JUDICIAL DECISIONS
Elements of defense of mutual mistake of law.
- Mutual mistake of law is good defense against action to recover money under contract of purchase when there is full knowledge of all facts, provided mistake be clearly proved and plaintiff cannot in good conscience receive money sued for. Holmes v. Holmes, 140 Ga. 217, 78 S.E. 903 (1913).
In cases contemplated by law, purchaser may sue for recission in law or equity. Lundin v. Hill, 105 Ga. App. 449, 125 S.E.2d 105 (1962).
Same principles apply in law and equity as to defense of mistake.
- When defendant in court of law seeks to avoid defendant's contract on ground of mistake, defendant must, by defendant's pleadings, allege grounds of mistake, as fully as defendant is required to do in court of equity to entitle defendant to relief. Hargrove v. Bledsoe, 78 Ga. App. 107, 50 S.E.2d 223 (1948).
Mutual mistake may be a good defense in law to enforcement of contract, but defendant seeking in court of law to avoid defendant's contract for this reason must allege grounds of mistake as fully as defendant would be required to do in court of equity. Mangham v. Hotel & Restaurant Supply Co., 107 Ga. App. 619, 131 S.E.2d 74 (1963).
One seeking to avoid obligation of contract by defense of mutual mistake in court of law is bound by same principles as in court of equity. Romine, Inc. v. Savannah Steel Co., 117 Ga. App. 353, 160 S.E.2d 659 (1968).
Specificity with which to plead mutual mistake.
- When party seeks to avoid contract because of mutual mistake, that party's pleading must show particular mistake and illustrate how it occurred, why terms of contract which pleader insist should have been inserted were left out, or how terms not agreed upon came to be inserted. Mangham v. Hotel & Restaurant Supply Co., 107 Ga. App. 619, 131 S.E.2d 74 (1963).
When an employee alleged no genuine mutual mistake, but instead claimed that the employee did not think that the employee's invention was covered by the invention agreement the employee had with the employer, the employee's rescission claim based on mutual mistake failed. Georgia-Pacific Corp. v. Lieberam, 959 F.2d 901 (11th Cir. 1992).
Mistake not due to negligence nor pertaining to fact in dispute.- A settlement contract based on a mistake of material fact, since the mistake was not due to the negligence of the party claiming mistake and since it did not pertain to a fact in dispute, may be invalidated on that ground like other agreements. Insurance Concepts, Inc. v. Western Life Ins. Co., 639 F.2d 1108 (5th Cir. 1981).
Correction for one party's mistake or ignorance.- Absent special circumstances, a court cannot correct for the mistake or ignorance of one party when the party had the responsibility, and opportunity, to protect oneself. Smith v. Seaboard Coast Line R.R., 639 F.2d 1235 (5th Cir. 1981).
Not court's province to pass on wisdom of particular agreement, even though the agreement's terms may have been accepted by one party as the result of oversight or poor cerebration. Smith v. Seaboard Coast Line R.R., 639 F.2d 1235 (5th Cir. 1981).
Mistake in judgment or opinion as to value of property does not authorize judicial interference. Hargrove v. Bledsoe, 78 Ga. App. 107, 50 S.E.2d 223 (1948).
Equity will not relieve one from erroneous acts or omissions resulting from one's own negligence. Mangham v. Hotel & Restaurant Supply Co., 107 Ga. App. 619, 131 S.E.2d 74 (1963).
Absent fraud, party cannot recover for misunderstanding resulting from party's own fault or negligence.
- Party to contract, in absence of fraud, cannot avoid contract by reason of misunderstanding contract, unless it appears that the party's misunderstanding was not result of the party's own fault or negligence. Bailey Co. v. West Lumber Co., 1 Ga. App. 398, 58 S.E. 120 (1907). See § 4581.
Unilateral mistake based upon defendant's negligence in failing to determine the facts would not justify defendant's failure to perform under O.C.G.A. § 13-5-4. Capitol Materials, Inc. v. Kellogg & Kimsey, Inc., 242 Ga. App. 584, 530 S.E.2d 488 (2000).
Mistake as to ownership of land prevented enforcement of notes given by true owner.
- When, under mistake of fact as to true ownership of land, one gives notes for purchase price to another, when in fact party giving notes was true owner, party will not be bound thereby. O'Neal v. Phillips, 83 Ga. 556, 10 S.E. 352 (1889).
On facts, no mutual mistake within meaning of law. State Hwy. Dep't v. MacDougald Constr. Co., 102 Ga. App. 254, 115 S.E.2d 863 (1960).
Summary judgment improper if questions of fact remained regarding whether quitclaim deed was contrary to parties' agreement.
- Trial court erred in granting a son's motion for summary judgment as to a mother's counterclaim seeking to eject the son from a home and to have a quitclaim deed rescinded or reformed because material questions of fact remained regarding whether the terms of the quitclaim deed were, by mutual mistake, contrary to the agreement of the parties; the mother's deposition testimony could reasonably be construed to signify that the mother expressed her willingness to convey the property only if she retained a life estate and that the son accepted the conveyance subject to that condition. Hall v. Hall, 303 Ga. App. 434, 693 S.E.2d 624 (2010).
Trial court erred in setting aside consent decree.
- Trial court erred in finding that a consent judgment was void due to impossibility of performance or lack of mutuality and in denying the sellers' motion for judgment instanter on the consent judgment because the purchasers accepted the risk that the purchasers would be unable to complete the road on time per the agreement and set up an alternative method of compliance, namely, the payment of money to the sellers. Kothari v. Tessfaye, 318 Ga. App. 289, 733 S.E.2d 815 (2012).
Cited in Green v. Lowry, 38 Ga. 548 (1868); D.H. Overmyer Co. v. Joe Summers Roofing Co., 120 Ga. App. 188, 169 S.E.2d 821 (1969); Citizens Bank v. Barber, 123 Ga. App. 507, 181 S.E.2d 545 (1971); Crider v. Scoma, 142 Ga. App. 413, 236 S.E.2d 150 (1977); Sepulvado v. Daniels Lincoln-Mercury, Inc., 170 Ga. App. 109, 316 S.E.2d 554 (1984); Doyal v. Thornton, 205 Ga. App. 74, 421 S.E.2d 314 (1992).
RESEARCH REFERENCES
Am. Jur. 2d.
- 17 Am. Jur. 2d, Contracts, §§ 104, 107, 131, 133, 148.
Mutual Mistake Over Physical Condition of Real Estate as Basis for Rescission of Contract, 48 POF3d 505.
C.J.S.- 17 C.J.S., Contracts, §§ 129, 134 et seq.
ALR.
- Rescission of sale of corporate stock on account of mutual mistake due to error in corporate books, 5 A.L.R. 255.
Validity of separation agreement as affected by fraud, coercion, unfairness, or mistake, 5 A.L.R. 823.
Relief from contract of sale because of mistake as to amount of commodity which it calls for, 31 A.L.R. 384.
Right of public contractor to allowance of extra expense over what would have been necessary if conditions had been as represented by the plans and specifications, 76 A.L.R. 268.
Promise of additional compensation for completing building or construction contract, 138 A.L.R. 136.
Rights and remedies as to premium where insured was under mistaken belief regarding value, nature, or existence of property subject of insurance, 138 A.L.R. 924.
Reformation on ground of mutual mistake regarding character or extent of estate or title imported by language used in instrument, 141 A.L.R. 826.
Mistake as to existence, practicability of removal, or amount of minerals as ground for relief from mineral lease, 163 A.L.R. 878.
Mistake, accident, inadvertence, etc., as ground for relief from termination or forfeiture of oil or gas lease for failure to complete well, commence drilling, or pay rental, strictly on time, 5 A.L.R.2d 993.
Effect, as between stockbroker and customer, of broker's mistaken sale of security other than that intended by customer, 48 A.L.R.3d 513.
Mistake or want of understanding as ground for revocation of consent to adoption or of agreement releasing infant to adoption placement agency, 74 A.L.R.3d 489.
Public contracts: duty of public authority to disclose to contractor information, allegedly in its possession, affecting cost or feasibility of project, 86 A.L.R.3d 182.
Right of bidder for state or municipal contract to rescind bid on ground that bid was based upon his own mistake or that of his employee, 2 A.L.R.4th 991.