Texas Causes of Action & Affirmative Defenses

Texas Causes of Action & Affirmative Defenses

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Friday, October 11, 2013

Mutual Mistake argument in contract dispute to avoid enforcement or liability

   
Mutual Mistake as affirmative defense in contract dispute

To establish the defense of mutual mistake in a written instrument, [Defendant] must plead and prove (1) the original agreement, and (2) a mutual mistake made in reducing the original agreement to writing. Peters v. Gifford-Hill & Co., 794 S.W.2d 856, 860 (Tex. App.-Dallas 1990, writ denied). 
   
The party asserting mutual mistake must prove what the true agreement was, but "his case is not made by proof that there was an agreement which is at variance with the writing. He must go further and establish the fact that the terms and provisions of the writing which differ from the true agreement made were placed in the instrument by mutual mistake." Id. (citing Sun Oil Co. v. Bennett, 84 S.W.2d 447, 451 (Tex. 1935)); see also Balboa Ins. Co. v. K&D & Assoc., 589 S.W.2d 752, 757 (Tex. Civ. App.-Dallas 1979, writ ref'd n.r.e.) (evidence must show both parties were acting under the same misunderstanding of the same material fact to establish mutual mistake). 
  
Mutual mistake is generally established from all of the facts and circumstances surrounding the parties, and the execution of the instrument. Simpson v. Curtis, 351 S.W.3d 374, 378 (Tex. App.-Tyler 2010, no pet.).

SOURCE:  DALLAS COURT OF APPEALS -  No. 05-11-01536-CV - 6/7/2013