A misunderstanding occurs when

one party does not understand a term of the agreement because she did not read the contract.

the parties agree to all terms but the subject matter of the contract does not exist.

the parties have different understandings of a term in the contract and both know about the difference.

one party creates a vague term in the contract to make the contract unenforceable.

the parties have different understandings of a term in the contract but neither knows it.