What is the test for rescinding a contract where a mistake was made by one of the parties?

California, United States of America


The following excerpt is from Lopez v. Phillipsen, E041358 (Cal. App. 6/6/2007), E041358 (Cal. App. 2007):

Specifically, where the mistake was unilateral, the party seeking to rescind the contract may show that the other party knew of the mistake or caused the mistake. Alternatively, the party may show the following facts: (1) the mistake was regarding his basic assumption in making the contract; (2) the mistake had a material affect on the agreed exchange of performances adverse to him; (3) the party did not bear the risk of the mistake; and (4) that it would be unconscionable to enforce the contract. (See Donovan v. RRL Corp. (2001) 26 Cal.4th 261, 282.)

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