Contracts I

Restatement Second of Contracts § 153


Restatement Second of Contracts § 153

When Mistake of One Party Makes a Contract Voidable

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Where a mistake of one party at the time a contract was made as to a basic assumption on which he made the contract has a material effect on the agreed exchange of performances that is adverse to him, the contract is voidable by him if he does not bear the risk of the mistake under the rule stated in [R2C § 154], and

  1. the effect of the mistake is such that enforcement of the contract would be unconscionable, or
  2. the other party had reason to know of the mistake or his fault caused the mistake.

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