Dan agrees to build a house for a newlywed couple. The couple buys a plot of land, but then finds out that they cannot build the house in accordance with local zoning law. Both Dan and the couple were mistaken as to this fact. This is an example of a .

Bilateral mistake in law

Explanation:

Both Dan and the newlywed couple are mistaken to the facts to the facts that the couple cannot build build the house in accordance with local zoning law.

Bilateral mistake in law: This refers to an error which occurs when both parties involved in a transaction such that the two parties sign a contract under a certain understanding while the contract actually conveys a different meaning. It is the misinterpretation or misunderstanding of a law or an agreement.

Types of Bilateral mistakes

1) Mistake as to subject matter.

It includes mistake related to existence, mistake related to identity, mistake related to title, mistake related to quantity, mistake related to price, mistake related to quality.

2) Mistake as to the possibility of performance.

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