Employment K. D had to buy P out. After found out P had violated employment K. Could have terminated K w/o buying out. D seeks return of money
When mutual mistake, the mistake must be fundamental and a K is void when:
*Mistake as to subject matter - Before or at the time of contracting if the subject matter of the K is destroyed or doesn’t exist
*Mistake as to quality – only if the subject matter is essential different from what they thought they were contracting for
What is the effect of mutual mistake? Makes a K VOID
You can have mistake to identity, mistake as to subject matter, and mistake as to title (void) (res sua), and mistake as to quality.
**Mistake as to subject matter – contract to ship X aboard a ship that has already sunk
**Mistake as to Quality – this case
***Mistake will not affect assent unless it is the mistake of both parties, and is about the existence of some quality which makes the thing w/o the quality essentially different from the thing as it was believed to be.
**Essential different (fundamental) – need this to render a K void
Sets a high standard – D already owned what they paid for (they could have fired P) – they paid for something, the right to release a K, which they had already had the right to do – court doesn’t look at this