Mutual Mistake as a Contract Defense

AVOIDANCE OF CONTRACT BASED ON MUTUAL MISTAKE When parties to an agreement have contracted under a misconception or ignorance of a material fact, the agreement will be avoided under the doctrine of mutual mistake. Williams v. Glash, 789 S.W.2d 261, 264 (Tex. 1990). When can the affirmative defense of mutual mistake be invoked? To prove a mutual mistake, the evidence must show that both parties were acting under the same misunderstanding of the same material fact when the agreement was executed. Seymour v. American Engine & Grinding Co., 956 S.W.2d 49, 58 (Tex. App.—Houston [14th Dist.] 1996, writ denied). “The doctrine of mutual mistake must not routinely be available to avoid the results of an unhappy bargain.” Williams v. Glash, 789 S.W.2d 261, 265 (Tex. 1990). SOURCE: 04-08-00745-CV (9/9/09) (San Antonio Court of Appeals) (defense of mutual mistake not conclusively established)