An agreement is not binding when: a. both parties make a mistake regarding a material fact. b. one party makes a mistake regarding a material fact but the mistake is unknown to the other contracting party. c. one party makes a mistake of law. d. both parties make a mistake in judgment.

A). Both parties make a mistake regarding a material fact.

Explanation:

An agreement is demonstrated as a formal decision among two parties after negotiation and mutual approval by both the parties. It is an arrangement that legally binds both the parties upon a specific course of actions to be done in future.

As per the question, an agreement fails to bind when 'both the parties make a mistake regarding material fact' that damages its validity and makes it unenforceable. The ignorance of the valid key elements about the matter of fact makes the agreement invalid. Therefore, it is always advised that an agreement must consider all the key points considering the matter of fact to ensure its legal binding. Thus, option A is the correct answer.

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