Mutual versus Unilateral Mistake in Contracts
1993, The Journal of Legal Studies
Eric Bennett Rasmusen, Ian Ayres
Courts sometimes allow contracts to be voidable because of mistakes in their basic assumptions. The common wisdom is that rescission is more likely to be granted if the mistake is mutual rather than unilateral---an incorrect belief common to both parties, not just to one. Rescission for mistake can be justified as a way to avoid inefficient transactions and to reduce the costs of collecting information on whether a mistake has been made. These reasons do not justify a general rule distinguishing between mutual and unilateral mistake.
Rasmusen, Eric Bennett and Ian Ayres (1993), "Mutual versus Unilateral Mistake in Contracts," The Journal of Legal Studies, Vol. 22, June, 309-343.