In contract law, a unilateral mistake occurs when only one party to the contract has a false belief about a material fact. The defining feature of a unilateral mistake pertinent to the correct choice is the requirement that the non-mistaken party must have knowledge of the mistake for rescission to be granted.
For rescission to be possible in the context of a unilateral mistake, it is imperative that the non-mistaken party either knows, or should reasonably know, that the other party is operating under a misunderstanding. If the non-mistaken party does not recognize the error, then the mistaken party may not be able to rescind the contract. This principle helps maintain fairness and prevents one party from taking advantage of the other's error without any awareness of that error.
Understanding this concept is crucial for assessing situations when a party seeks to void a contract based on a mistake, as the awareness of the mistake by the other party fundamentally impacts the legality of rescission.
The mention of the other choices, while relevant for context, does not apply to the specific definition of a unilateral mistake. Rescission being available to both parties usually relates to mutual mistakes, and the idea that the mistaken party has ultimate power does not reflect the principles governing unilateral mistakes. Also,