This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
If a party to a contract has known of a material fact and has entered into such contract because he has forgotten such fact, some courts deny his right to relief on the ground of mistake.1 . Thus forgetfulness by vendor of subsisting equities in property belonging to another does not entitle vendor to relief,2 nor does forgetfulness of the insolvency of a corporation.3 There is, however, some authority for treating forgetfulness as mistake. Thus where A sold land to B, meaning to reserve an easement in an aqueduct thereon, of which aqueduct B had no knowledge when he bought the land and which was worth much more than the cost of the land, it was held that A might have the easement or rescission at B's election.4 Forgetfulness may interest of said county in law and in equity, of whatever the same may consist and to as full and to as great an extent as the county may hold or be entitled to the same at and for the further sum of $3,000": 47 la. 93. The court, in holding that rescission should be allowed in equity, said that the county "supposed and had reason to suppose not only that no such allowance had been made but that it was doubtful whether it ever would be made": 47 la. 96. This reasoning would lead to the conclusion that rescission could not be had if the authorities cited earlier in this section are to be regarded as correct. A complicating fact in this case is that the vendee of the county knew of such allowance and did not disclose it. See ch. XIV.
19 Greenleaf-Johnson Lumber Co. v. Leonard, 145 N. Car. 339, 59 S. E. 134. (It was, however, said that an instruction to the jury to the effect that her acknowledgment "related back to the time of signing," should have been given.) amount to mistake in actions to recover payments made by mistake,5 and no reason appears why the rule should be more rigid if the party who acts under a mistake is attempting to resist liability upon a contract than it is if he is trying to recover payments.
20 Greenleaf-Johnson Lumber Co. v. Leonard, 145 N. Car. 339, 59 S. E. 134.
1 Dewey v. Whitney, 93 Fed. 533, 35 C. C. A. 414 [affirming 85 Fed. 3251; Pickett v. Casualty Co., 60 S. |Car. 477, 38 S. E. 160, 629.
2 Dewey v. Whitney, 93 Fed. 533, 35 C. C. A. 414 [affirming 85 Fed. 3251.
3 Pickett v. Casualty Co., 60 S. Car. 477, 38 S. E. 160, 629.
4 Brown v. Lamphear, 35 Vt. 252.