What are the exceptions to a contract where the contract is signed by one party to the other's mistake as to the terms?

British Columbia, Canada


The following excerpt is from Karroll v. Silver Star Mountain Resorts Ltd., 1988 CanLII 3294 (BC SC):

To these exceptions a third has been added. Where the party seeking to enforce the document knew or had reason to know of the other’s mistake as to its terms, those terms should not be enforced: Waddams, The Law of Contracts, quoted with approval in Tilden Rent-A-Car v. Clendenning, supra, per Dubin J.A. at p. 605. This new exception is entirely in the spirit of the two recognized in 1934 in L’Estrange v. Graucob, supra. Where a party has reason to believe that the signing party is mistaken as to a term, then the signing party cannot reasonably have been taken to have consented to that term, with the result that the signature which purportedly binds him to it is not his consensual act. Similarly, to allow someone to sign a document where one has reason to believe he is mistaken as to its contents, is not far distant from active misrepresentation.

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