Contracts I

Restatement Second of Contracts § 154


When a Party Bears the Risk of a Mistake

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A party bears the risk of a mistake when

  1. the risk is allocated to him by agreement of the parties, or
  2. he is aware, at the time the contract is made, that he has only limited knowledge with respect to the facts to which the mistake relates but treats his limited knowledge as sufficient, or
  3. the risk is allocated to him by the court on the ground that it is reasonable in the circumstances to do so.