How To Prove A Texas Mutual Mistake Defense

 

 

In Texas, a defense of Mutual Mistake is defined as:

Mutual Mistake is an error of both parties to a contract, whereby each operates under the identical misconception concerning a past or existing material fact.

It simply means:

When one or more parties to a contract have the wrong understanding of a material fact.

There are 4 elements of the defense:

• Element 1. There was a contract between the parties. A mutual mistake defense requires that both parties involved had a contract, meaning they agreed to specific terms, but both misunderstood a key fact that affected their agreement, leading to a situation where the contract may not be valid due to that shared misunderstanding.
  

  Facts that might support this element look like:

  * The parties exchanged signed documents outlining the terms of the agreement, indicating mutual assent to the contract.
  * Both parties performed their respective obligations under the contract, demonstrating their intent to be bound by its terms.
  * The parties engaged in negotiations and discussions that culminated in a clear agreement on the essential terms.
  * Payment was made by one party, and services were rendered by the other, fulfilling the contract’s requirements.
  * Correspondence between the parties confirms their understanding and acceptance of the contract’s terms prior to execution.

• Element 2. There was a mistake of fact made. A mutual mistake of fact occurs when both parties in a contract are wrong about a key detail, which can make the agreement invalid because they based their deal on incorrect information that neither of them realized was wrong.
  

  Facts that might support this element look like:

  * Both parties believed the property in question was zoned for commercial use, but it was actually zoned for residential use.
  * The seller provided documentation indicating the age of the roof was ten years, but it was later discovered to be twenty years old.
  * Both parties were under the impression that the sale included all appliances, but the written agreement only specified the refrigerator.
  * The buyer assumed the property had access to city water, while the seller was unaware that it relied on a private well.
  * The contract was based on the understanding that the property was free of liens, but a lien was discovered after the agreement was signed.

• Element 3. The mistake was held mutually by the parties. Both parties made the same mistake. A mutual mistake occurs when both parties involved in a contract share the same incorrect belief about a key fact, which can affect the agreement’s validity, as they both misunderstood an important aspect of what they were agreeing to.
  

  Facts that might support this element look like:

  * Both parties believed the property being sold was free of any liens, but it was later discovered that there were outstanding debts attached to the property.
  * During negotiations, both parties referred to the same set of documents, which contained incorrect information about the property’s zoning status.
  * Both parties expressed a shared understanding that the sale price was based on the assumption that the property was in good condition, which was later proven to be false.
  * The contract explicitly stated that the parties were relying on the same appraisal, which inaccurately valued the property due to outdated market data.
  * Both parties acknowledged in their communications that they were under the impression that all necessary permits were in place, which was later found to be untrue.

• Element 4. The mistake materially affected the agreed-upon exchange. A mutual mistake occurs when both parties in a contract are wrong about a key fact, and this error significantly changes what they agreed to exchange, making the deal unfair or impossible to fulfill as originally intended.
  

  Facts that might support this element look like:

  * The parties agreed on a price of $10,000 for the property, but due to a mistake, one party believed the price was $8,000.
  * The contract specified a delivery date of January 1, but both parties mistakenly understood it to be February 1, affecting the timing of the exchange.
  * The seller misrepresented the square footage of the property, leading the buyer to believe they were purchasing a larger space than what was actually offered.
  * The buyer intended to purchase a specific model of equipment, but both parties mistakenly referenced a different model, which had significantly different capabilities and value.
  * The parties agreed on a quantity of 500 units, but due to a clerical error, one party believed the agreement was for 1,000 units, impacting the overall transaction.

^{(See City of Colony v. North Tex. Mun. Water, 272 S. W. 3d 699 (Tex. Court of Appeals 2008).)}
If you’re in court without a lawyer and plan to assert a Defense of Mutual Mistake, having a Personal Practice of Law at Courtroom5 is essential. You’ll need to determine what to file at each phase of your case and prepare legal documents that are supported by thorough legal research and a strong analysis of the facts. Navigating the complexities of Mutual Mistake requires careful preparation and strategic thinking to effectively present your defense.

Prove Your TX Mutual Mistake Defense

U.S. Civil Cases Only