Also known as: mistake of material fact · material fact mistake · mistake of fact
Written by attorneys — see sources below.
2 senses
An erroneous belief about a fact that, if true, would mean the defendant lacked the culpable mental state required for a material element of the offense. The defense succeeds when the mistake negates purpose, knowledge, recklessness, or negligence.
An erroneous belief about a fact that, if true, would mean the defendant lacked the culpable mental state required for a material element of the offense. The defense succeeds when the mistake negates purpose, knowledge, recklessness, or negligence.
Melissa Mills, a security guard, confronted an intruder on property she believed belonged to her employer. The intruder was in fact privileged to enter under a court order unknown to Mills. Because the intruder's privilege rested on a reasonable mistake of fact not caused by Mills's fault, Mills remained privileged to defend herself against the resulting confinement.
2 common questions
An erroneous belief about an existing fact that affected specific terms of a contract or donative document. When proved by clear and convincing evidence, the error permits reformation to match the parties' or donor's actual intention or supports rescission.
Michelle Murphy's will left her entire donor-advised account at Helping Hands Fund to a charity. She maintained two accounts under different emails but referred to them collectively in planning discussions. Clear and convincing evidence showed the omission of the second account resulted from a mistake of fact in expression, so the court reformed the will to include both accounts.
An erroneous belief about an existing fact that affected specific terms of a contract or donative document. When proved by clear and convincing evidence, the error permits reformation to match the parties' or donor's actual intention or supports rescission.
Each sense below has its own examples, sources, and questions.
A mistake of fact is a defense when it negates the purpose, knowledge, recklessness, or negligence required for a material element of the offense. If the defendant honestly believed facts that would make the conduct lawful, the prosecution cannot prove the required mental state beyond a reasonable doubt.
No. An intentional entry onto land possessed by another remains a trespass even when the entrant acts under a reasonable mistake of fact, provided the mistake was not induced by the possessor.
Maurice Marshall executed a trust that omitted a remainder interest he had repeatedly stated he intended to create for his niece. Extrinsic evidence proved by clear and convincing evidence that a mistake of fact in expression caused the omission. The court reformed the trust instrument to include the intended remainder.
Mustafa Mahmoud sold Miranda Morales a cow both parties believed was barren. After the sale, the cow delivered a calf, revealing it was fertile. Because the mutual mistake concerned a material fact about the subject matter, Morales could avoid the contract.
In May 1886, T. C. Sherwood, a banker living in Plymouth in Wayne County, Michigan, sought to purchase cattle from Hiram Walker & Sons. The defendants resided in Detroit, conducted business at Walkerville, Ontario, and maintained a farm at Greenfield in Wayne County where they kept blooded polled Angus cattle that they believed were barren. On May 5, 1886, Sherwood visited the Greenfield farm after the defendants informed him they had a few head there that were probably barren and would not breed. A few days later Sherwood negotiated with one of the defendants for the purchase of the cow known as Rose 2d of Aberlone. On May 15, 1886, the parties reached final agreement by telephone that Sherwood would pay five and one-half cents per pound live weight less fifty pounds shrinkage. That same day the defendants sent Sherwood a letter confirming the sale and enclosing an order directing George Graham to deliver the cow at King’s cattle-yard, send a halter, and have her weighed. On May 19, 1886, Sherwood wrote Graham that he would collect the cow the following morning and instructed that she not be watered. On May 20 the defendants learned from Graham that the cow appeared to be with calf, telegraphed Sherwood that they could not sell her, and instructed Graham not to deliver. On May 21 Sherwood presented the order and letter to Graham, who refused delivery; Sherwood then tendered eighty dollars to Hiram Walker, who refused both the money and the cow. Sherwood commenced a replevin action in justice’s court and obtained judgment. The defendants appealed to the circuit court of Wayne County, where a jury returned a verdict for the plaintiff. After securing possession under the writ, Sherwood caused the cow to be weighed at 1,420 pounds at a location other than King’s cattle-yard. The cow gave birth to a calf in October 1886. At the time of the transaction both parties believed the cow was barren; she had cost the defendants $850 and, if capable of breeding, would have been worth between $750 and $1,000.
View caseMarco Marquez contracted with Morgan Financial for aluminum at a price escalated by the Wholesale Price Index. Both parties assumed the index would track actual non-labor production costs. When the index diverged due to market changes, the mutual mistake of fact regarding the index's behavior permitted reformation of the pricing formula.
In 1966 Essex Group, Inc., a manufacturer of electrical wire products, decided to expand its aluminum wire production and began negotiations with Aluminum Company of America (ALCOA) for a long-term supply of aluminum. By December 26, 1967, the parties entered into the Molten Metal Agreement under which Essex would supply alumina to ALCOA, which would smelt it into molten aluminum at its Warrick, Indiana facility for Essex to pick up. The agreement was to run until the end of 1983, with Essex having an option to extend it to 1988. Essex also entered into a separate Alumina Purchase Agreement with Alcoa of Australia Proprietary Ltd. for the supply of alumina. The price under the Molten Metal Agreement was calculated using a formula with three components. A demand charge was indexed to the Engineering News Record Construction Cost Index. A non-labor production cost component was indexed to the Wholesale Price Index-Industrial Commodities (WPI-IC). A labor production cost component was indexed to ALCOA's average hourly labor costs at Warrick. The initial price was fifteen cents per pound, subject to an overall cap at sixty-five percent of a specified market price for aluminum. ALCOA consulted economist Alan Greenspan in developing the indexing system, and both parties examined the historical performance of the indices before agreeing to them. The parties also executed a Side Letter Agreement addressing concerns under the Robinson-Patman Act, providing that if the agreement were construed as a sale of goods, either party could terminate it. From 1968 through the early 1970s, the price formula produced returns to ALCOA within the expected range of one to seven cents per pound net. Beginning in 1973, following actions by OPEC to increase oil prices and unanticipated pollution control costs, ALCOA's electricity costs at Warrick rose much more rapidly than the WPI-IC. As a result, ALCOA began incurring substantial out-of-pocket losses on the contract, projected to exceed sixty million dollars over the remaining term if unchanged. In June 1979, ALCOA notified Essex that it would reduce deliveries by fifteen percent, and Essex disputed ALCOA's authority to do so under the contract terms. On July 21, 1975, representatives of ALCOA and Essex, including Krome George and Paul O'Malley, met and discussed possible revision of the pricing formula, but the parties dispute whether an oral agreement to modify the contract was reached. In 1977 and 1978, electrical generating plant failures and a coal strike caused interruptions in ALCOA's smelting operations, leading to reduced deliveries to Essex that ALCOA attributed to causes beyond its control. ALCOA filed this action in the United States District Court for the Western District of Pennsylvania seeking reformation of the contract, a declaratory judgment regarding an alleged oral modification and termination rights, while Essex counterclaimed for damages and specific enforcement of the original delivery obligations. The case proceeded to a non-jury trial on liability issues, during which evidence was presented including tables showing the divergence between the WPI-IC and ALCOA's actual non-labor costs, testimony from company officials, and records of contract negotiations and performance. Jurisdiction is based on diversity of citizenship with the amount in controversy exceeding the jurisdictional threshold, and the parties agreed that Indiana law governs the contract.
View case2 common questions
Reformation requires clear and convincing evidence that a mistake of fact or law affected specific terms and that the donor's actual intention differed from the written text. Direct evidence of intention contradicting the plain meaning may be considered.
Yes. When both parties to a sale share an erroneous belief about a material fact such as the subject matter's essential quality, the buyer may avoid the contract.