Recovery of money paid under a mistake of fact.... 1574 Recovery of the value of goods or services rendered under a mistake... 1575 1576 Unilateral mistake as to contents of writing.. 1577 Relief sometimes allowed for unilateral mistake in other cases.. 1578 Criticism of relief for unilateral mistake..... 1579 An executed or partially executed transaction will not be rescinded for unilateral mistake.. 1580 Exceptions to the rule denying relief for mistake of law.. 1584 Mistake of law as to meaning of instrument is ground for reformation.... 1585 1586 Mistake as to legal consequences.. 1587 Mistake of matter of law affecting the situation antecedent to the bargain.... 1588 Mistake as to antecedent private rights. . . . 1589 Money paid under a mistake of law by a public officer or to an officer of the court...... 1590 Change of position bars recovery of money paid under a mistake... 1535. Effect of mistake on contracts. All writers who deal with the topic of mistake agree that there is great confusion of thought in discussions of the subject, but they attribute this confusion to different causes.1 The chief causes though frequently not recognized as such seem to be, 1. Confusion as to whether mental mutual assent or an expression of assent is an essential element in the formation of a contract; 2. Borrowing from the Civil law classification and rules which are not appropriate to English law; and 3. Failure to distinguish between an attempted contract entirely void because of mistake, and a contract which is merely voidable. 1 See 11 Columbia L. Rev. 197 (Roland R. Foulke). The term mistake itself is moreover often used with two meanings. Story defines mistake as including some unintentional act, or omission, or error; 2 and this definition is often repeated. Another learned writer says "the conception of a mistake involves in the first place the idea of action as a mistake can never be predicated of a state of mind." In every-day speech mistake is doubtless used in two senses. When a man labors under a mistake his mental attitude is referred to, but it might also be said that one of his acts was a mistake. In legal phraseology, however, it seems that mistake is always merely a state of mind. Of course a state of mind produces no legal consequences unless some act capable of legal consequences takes place concurrently with the state of mind, and this is the only accurate meaning which can be attached to the statement often made that mistake as such has no legal effect; but what the effect of the act would be apart from the mental error, and whether this effect is changed because of that error, are two questions which must be separately considered. The subject of mistake properly includes only the second of these questions and involves the effect of erroneous ideas upon legal acts, or upon acts which would have been legal acts had it not been for the error. In this treatise the subject is necessarily confined to the effect of such erroneous ideas upon acts connected with the formation, performance or discharge of contracts. § 1536. Confusion concerning elements of contract. If mental assent is a necessary element of contract, and if offer and acceptance are important merely as proving this mental assent, as the ultimate fact to be established, a failure of 21 Equity Jurisprudence (13th ed.), 108. 3 11 Columbia Law Rev. 199 (Foulke). An illustration of the danger of understanding mistake in the sense of act rather than in the act of state of mind is illustrated by the language in Meek v. Hurst, 223 Mo. 688, 696, 122 S. W. 1022, and Wolz v. Venard, 253 Mo. 67, 83, 161 S. W. 760, intimating that a mistake of a scrivener in writing a deed was of no consequence unless he was the agent of both parties, for otherwise it is said the mistake (apparently meaning the erroneous writing) would not be that of both parties. It is obvious that the mental error of both does not depend on the agency of the scrivener. either party to express his actual intent is of vital importance as indicating that no assent existed though the appearance of assent might be established by an offer and acceptance. That is, if A said, "I offer to sell my horse" for a certain price when he meant he would sell his cow, and the offeree accepted the offer intending to buy the horse, there would be no contract because no mutual assent. 6 On the other hand, if the expression of assent by the parties is what constitutes a contract, there are the essential elements in the case in question. As has previously been shown, it seems clear that whatever difference there may be in the expressions of courts, the actual results of the decisions favor the objective theory. This is sufficiently indicated in the decisions at law on the parol evidence rule (which is necessarily based on the assumption that the written expression of the parties is controlling) and by the decisions on unwritten contracts enforcing liability although there may have been misunderstanding between the parties,' for under the subjective view any misunderstanding between the parties would be fatal unless an estoppel could be made out. Doubtless the law is generally expressed in terms of subjective assent, rather than of objective expressions, the latter being said to be "evidence" of the former, as for example in the so-called parol evidence rule; but when it is established that this is no rule of evidence the whole subjective theory falls to the ground. Under the guise of conclusive presumptions of mental assent from external acts, the law has been so built up that it can be now expressed accurately only by saying that the elements requisite for the formation of a contract are exclusively external. § 1537. Elements of contract in equity. 8 It is in the decisions of courts of equity that expressions are most frequently found favoring the subjective theory. But though in a few cases promises are unquestionably enforced by *Supra, §§ 20, 94, 95, 606. Which, however, in recent times often tend strongly to the objective side. "Assent in the sense of the law is a matter of overt acts, not of inward unanimity in motives, design, or the interpretation of words." Holmes, J., equity which are not regarded as contracts in courts of law,' it cannot be admitted that equity has a different fundamental theory of the elements of contract from that obtaining in courts of law. Equity professes to accept the legal conception of a contract; and indeed with the administration of legal and equitable remedies confided to the same hands, as is now common, it would be as difficult as it is objectionable to have two definitions; and if attention is fixed not so much on what courts of equity have said as on what they have done, it is clear that they, like courts of law, have adopted an objective standpoint. This is proved by the following circumstances: (1) If the subjective theory were adopted, it would follow that in any case involving misunderstanding, that is a variance between the mental images of the proposed transaction formed by the two parties: (a) There would be no occasion for the jurisdiction of equity The agreement would be as invalid at law as in equity. The parol evidence rule does not forbid any proof which tends to show that no contract ever arose between the parties. It is true that the jurisdiction of equity to guard against a possible misuse of an apparent contract or conveyance might sustain occasional applications to a court of chancery on the principles of quia timet, but the bulk of decisions cannot be explained in this way. (b) Any mistake, whether small or great, would have the effect of preventing a contract. An offer and acceptance must agree not simply in the most important matters but in every particular. If the court is seeking mental assent it must find that assent in all details. (c) The fact that a mistake was favorable to the party making it would be immaterial. (d) Negligence of a party subject to a misunderstanding would be immaterial in the absence of estoppel. (e) Restoration by the plaintiff of the status quo could not be For example, promises to give real estate where a promisee has entered and made improvements. (See supra, § 139.) Promises within the Statute of Frauds enforced by equity because of part performance (see supra, § 494) do not fall in the same category since even at law a contract within the Statute of Frauds is recognized as a contract though unenforceable. a condition of relief. The existence or non-existence of a contract cannot depend upon that. If no contract exists the appropriate remedy for such restoration would be a cross action by the defendant based on quasi-contractual principles. 2. There would be no propriety in the requirement by equity of unusually clear proof to justify relief by way of reformation. If the intent of the parties not expressed in the writing forms the contract, a preponderance of evidence should be sufficient for proof of the contract, as for proof of any other right. 3. Finally, the parol evidence rule is applicable in equity as well as at law. Where a case of fraud is alleged or such mistake as equity deems a basis for relief or a defence to a suit for specific performance is made out, the parol evidence rule is disregarded because equity will not allow it to work injustice.10 But aside from such cases, the memorials of the parties which they have agreed upon as the external expression of their will, establish the terms of the contract as conclusively in equity as at law.11 If the fundamental nature of equity procedure is clearly kept in mind there will be little difficulty in harmonizing the apparent conflict of the statements by courts of law and courts of equity. When a court of equity says that one who has not the legal title to land is nevertheless the owner in equity, it is not denying rules established by courts of law or perhaps by statute for the transfer of real estate; it is saying that one who is confessedly not the formal owner should be given an owner's rights as against a certain person or persons.12 So in dealing with contracts and conveyances made under a mistake, equity frequently denies one who has a legal contract or conveyance the right to enforce it (rescission) and subjects one who has made no legal contract or conveyance, to the same obligations as if he had (reformation); or unites the two forms of relief. The practical importance of the distinction between this explanation of the action of a court of equity and that which is here criticised, is two-fold. 1. Where a conveyance is in question, the rights of a bona fide purchaser for value are recognized even though no estoppel 12 See supra, § 446a. 10 Tabor v. Cilley, 53 Vt. 487. 11 See supra, § 631. |