Discuss what happens when the parties to a contract make mistakes with respect to what they have agreed.

This question requires a review of the whole area of mistake and also an examination of the requirement of consensus in forming a contract. Students can even include a discussion of misrepresentation when misleading statements induce the mistake. Students should distinguish the different forms of mistake, including shared mistake, misunderstandings, and one-sided mistakes, indicating the court's approach when each happens. The court will apply a reasonable person test and apply the most reasonable interpretation when there is a disagreement over what the terms of a contract mean. Only where both explanations are reasonable will the court declare the contract void for lack of consensus. Where a shared mistake takes place-that is, where both parties make the same mistake-it is only where the mistake is important, such as a mistake about the existence of the subject matter, that it will be void. As far as a one-sided mistake, the principle of caveat emptor usually applies, and the person who made the mistake is out of luck. However, the principle of non est factum is available in limited circumstances, and students should explain what this means and when non est factum is not available. Students should also explain what happens when that one-sided mistake is induced by misrepresentation on the part of the other party.