1) Explain what constitutes a mistake for purposes of contract law. Distinguish between a unilateral and bilateral mistake. If Tony argues that the rug should be returned because of a unilateral mistake, will he win his case? 2) Explain what constitutes fraud for purposes of contract law. If Tony sues Lydia for fraud, will he win his case? 3) If Lydia is able to prove that neither party knew that the rug was a rare Persian rug, can she successfully defend against Tony's lawsuit? Explain. following scenario: Diego is moving to a new city because of a job change. He has not had sufficient time to find an apartment so he decided to secure short-term housing through an online hospitality service called Rent My Place. Diego filled out the online rental agreement and clicked the "I Accept" button at the end of the contract. Diego did not read the cancellation terms closely. He believed that he could cancel his one-month reservation if he gave a three-day notice. However, the terms of the contract state that the three-day notice applies only to week-to-week reservations. Cancellation is not allowed for one-month reservations. Shortly after arriving in the new city, Diego found a studio apartment to rent. When Diego attempted to cancel his one-month reservation with Rent My Place, his request was denied. If Diego argues that his unilateral mistake voids the contract because he did not fully assent to be bound by the terms of the "click-through" form, he will lose. When Diego clicked the "I Agree" button, he assented to be bound by the terms of the "click-through" contract. Diego's unilateral mistake will not help him to void the contract. This scenario, then addresses: Lydia is involved in a dispute over an area rug she purchased from her neighbor, Tony. Tony's mother left him the rug in her will. Tony had no space in his home for it, so he offered it to Lydia. The two settled on what they thought was a fair price of $100. A month later, an antiques hunter saw a picture of the rug and advised Tony that it was in fact a rare Persian rug worth at least $100,000. After learning of his mistake, Tony demanded that Lydia return the rug at once. Lydia refused, stating, "A deal is a deal." ***Courts will allow a contract to be rescinded under specific conditions. For unilateral contracts, a party may rescind the agreement if the following conditions exist: the other party to the contract knew or should have known about the mistake, the party's unilateral mistake is due to a substantial mathematical error or clerical error that is not the result of gross negligence, or the party who made the unilateral mistake would suffer great harm that would rise to the level of unconscionability. Bilateral contracts are subject to rescission when parties are mutually mistaken about a fact that is paramount to the contract subject matter. Alternatively, when there is a mutual mistake about the same material fact of the contract, either party has the option to cancel the contract. Bilateral mistakes generally occur when contract terms are uncertain. textbook Business Law and the Legal Environment : section 8.1 "General Perspectives on Contracts," section 8.2 "Sources of Contract Law," and section 8.3 "Basic Taxonomy of Contracts" from Chapter 8, "Introduction to Contract Law". Textbook Business Law and the Legal Environment: section 9.1 "The Agreement in General," section 9.2 "The Offer," and section 9.3 "The Acceptance" from Chapter 9, "The Agreement". Textbook: Business Law and the Legal Environment read section 10.1 "Duress and Undue Influence," section 10.2 "Misrepresentation," and section 10.3 "Mistake" from Chapter 10, "Real Assent". https://saylordotorg.github.io/text_business-law-and-the-legal-environment-v1.0-a/index.html https://legalvision.com.au/mistake-in-a-contract/ https://www.upcounsel.com/fraud-and-breach-of-contract