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Mutual Mistake

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

For example, a customer goes to the sample room of an interior decorator to select a carpet and asks the clerk to show him a navy carpet, which he subsequently purchases and takes with him. The sales slip notes that the carpet purchased is navy. When, upon examining the carpet in daylight, the customer discovers that it is black, not navy as he thought when he bought it, a mutual mistake would have occurred, since both the seller and buyer were in error concerning the correct color of the carpet sold. Since there had never been a true and complete meeting of the minds, no mutual assent was actually arrived at, and the buyer would be entitled to return the carpet and obtain a full refund.

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