Proving Defense of Unilateral Mistake
One affirmative defense to a breach of contract claim is the defense known as “unilateral mistake.” This is not an easy defense to prove and the party asserting this as a defense has the burden to prove it. Under this defense, the argument is that the contract cannot be enforced because there was a unilateral mistake that induced the party into entering into the contract.
To prove the affirmative defense of unilateral mistake, the party asserting this defense must prove the following four elements:
“(1) [T]he mistake was induced by the party seeking to benefit from the mistake, (2) there is no negligence or want of due care on the part of the party seeking a return to the status quo, (3) denial of release from the agreement would be inequitable, and (4) the position of the opposing party has not so changed that granting the relief would be unjust. ” DePrince v. Starboard Cruise Services, Inc., 43 Fla. L. Weekly D171b (Fla. 3d DCA 2018) quoting Rachid v. Perez, 26 So.3d 70, 72 (Fla. 3d DCA 2010).
The first element – the inducement element—requires making a false statement of a material fact or some other action that induced the mistake. DePrince, supra. Notably, the other party’s knowledge of an error is not enough and is different than inducement. See id.
The second element – the negligence element—requires the party that made the mistake (and acted on the inducement) not to have acted negligently in making the mistake.
For example, in DePrince, a cruise ship’s jewelry store sold a diamond for $235,000 when the diamond was actually worth millions. The ship sought to avoid the transaction and the buyer sued. The ship asserted unilateral mistake as an affirmative defense, meaning the ship needed to prove the aforementioned four elements required for this defense.
Please contact David Adelstein at [email protected] or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.
