Legal Definitions - essential mistake

Definition: A mistake that is so fundamental to a contract that it makes the performance of the contract essentially different from what was promised. It is a contractual provision that must be included for a contract to exist.

Example: A company agrees to sell a car to a customer, but mistakenly delivers a bicycle instead. This mistake is an essential mistake because the delivery of a bicycle instead of a car makes the performance of the contract essentially different from what was promised.

Explanation: In this example, the mistake is so fundamental that it changes the entire nature of the contract. The customer did not agree to purchase a bicycle, but a car. Therefore, the mistake is an essential mistake, and the contract cannot be enforced as it was not performed as promised.