Legal Definitions - Misunderstanding

Misunderstanding

Under contract law, a misunderstanding occurs when two parties to a contract have different interpretations of the same term or provision. This can be used as a defense against the formation of a contract.

Example 1: John agrees to sell his car to Jane for $5,000. However, John was thinking of a different car than the one Jane was interested in. This is a misunderstanding because both parties were thinking of different cars.

Example 2: Sarah agrees to rent an apartment from Tom for $1,000 a month. However, Sarah thought that the rent included utilities, while Tom thought it did not. This is a misunderstanding because both parties had different interpretations of what the rent included.

These examples illustrate how a misunderstanding can occur when both parties have different interpretations of the same term or provision in a contract. In both cases, the misunderstanding could be used as a defense against the formation of a contract because the parties did not have a meeting of the minds.