Mutual mistake

In contract law, a mutual mistake occurs when the parties to a contract are both mistaken about the same material fact within their contract. As such, there is no consensus ad idem, and this overlaps with the objective theory of contract, and there is no offer and acceptance. Hence the contract is void.

When there is a material mistake about a material aspect of the contract, the essential purpose of the contract, there is the question of the assumption of the risk. Who has the risk contractually? Who bears the risk by custom? Restatement (Second) of Contracts §154 deals with this scenario.

A mutual mistake on a collateral (non-material) fact will not afford the right of rescission. A collateral mistake is one that "does not go to the heart" of the contract.