​KembaraXtra – Legal Terms – Mutual Mistake
​A mutual mistake arises where both parties misunderstand each other during the formation of a contract.
Unlike a common mistake, where both parties share the same incorrect assumption, mutual mistake involves each party attaching a different meaning to the agreement.
If the court can objectively determine a single reasonable interpretation from the parties’ conduct and words, the contract remains valid.
However, if no genuine agreement can be identified, there is no true consensus between the parties and the contract may be declared void.
Mutual mistake is therefore concerned with whether the parties actually reached agreement on the same terms.