Which type of contract mistake occurs when one party is mistaken and the other party is aware but does nothing?

• A. Common
• B. Mutual
• C. Unilateral
• D. None of the above

Answer: (C)

Unilateral mistake occurs when only one party has a mistaken belief about a material fact in the contract, while the other party is aware of the error but does nothing to correct it. The described situation matches this: one party is mistaken, and the other knows the truth but remains silent or takes no corrective action. This differs from a common mistake, where both parties share the same mistaken belief, and from a mutual mistake, where each party is mistaken about different things. In practice, unilateral mistakes can affect enforceability and remedies, depending on the jurisdiction and the specifics of the case.