In simple terms, the word mistake is defined as an error, but it denotation somewhat narrows down when it is used in legal matters pertaining to real estate agreements. In the case of real estate matter, not all mistakes or common errors have an effect on an agreement and hence they are not regarded as a legal mistake or misrepresentation of facts. In fact, according to the law, an agreement cannot be proclaimed as annulled just because one or other party concerned in a deal had made an error. Actually, merely a few specific categories of mistakes may lead to a solution. Hence, it is essential to find out an error, decide whether its effect on an agreement is a lawful matter and if suitable counsel should be acquired.
Here is a guideline for people dealing in real estate. All mistakes in the context of real estate may be classified under three general titles.
A common mistake or error is said to have occurred when despite knowing the objectives of each other and accepting them, both parties in a real estate deal are by someway misguided regarding some basic data or fundamental information or truth relating to the property on sale. For instance, the seller as well as the buyer of the real estate thinks that the property takes account of a thoroughfare to the beach when actually this is not the fact, it is considered to be a common error or mistake. In such a case, the seller and buyer of the real estate may enter into an agreement that includes a particular thoroughfare to the beach with apposite measurements, but this term cannot be held as true. Such an error essentially does not offer a legal right of way over another person's property or any significant advantage and hence, it only deemed to be a common error or mistake between the buyer and seller of the concerned property.
A mutual or shared error occurs when the two parties (the seller and the buyer) misapprehend each other and are working against the interest or objectives of one another. For instance, the seller owns two plots of land on either side of a lake and the purchaser is of the opinion that he or she is acquiring the asset on the northern side of the water body or the owner is selling the real estate on the northern shore. Contrary to the buyer's perception, the seller is actually intending to sell the plot on the southern shore of the lake. In such an event, both the seller and the buyer would be in agreement on the basis of a mutual or shared error regarding the location of the property.
When one party (either the seller or the buyer) is in the wrong and the other party is aware of this error regarding the basic feature of an agreement, it is deemed to be a unilateral or one-sided mistake. For instance, the buyer is of the view that the plot he or she is acquiring is of one acre, but it is of a lesser size. The seller or owner knows about this misconception of the buyer, but does not make any effort to make things clear. Eventually, the buyer goes ahead with the agreement as well as the purchase on the basis of the erroneous information and suffers a loss.