What kind of mistake involves only one party's misunderstanding of a material fact in a contract?

A unilateral mistake occurs when only one party in a contract is mistaken about a material fact. This type of mistake implies that one party holds a misunderstanding or incorrect belief about a key aspect of the contract, while the other party has accurate information. For example, if a seller believes that a painting is an original work but the buyer knows it is a reproduction, the seller's misunderstanding creates a unilateral mistake regarding the contract terms.

In cases of unilateral mistake, the mistaken party may not be able to void the contract unless specific conditions are met, such as the other party being aware of the mistake or the mistake being of such a nature that it defeats the purpose of entering into the contract. Therefore, recognizing the distinction between unilateral mistakes and other types of mistakes, such as mutual mistakes, is crucial in contract law. Mutual mistakes involve a shared misunderstanding by both parties, whereas a unilateral mistake affects only one side.