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 makes an offer to B, in which A uses words which he does not intend to use and which give to the offer a different legal operation from that which A intended, B's acceptance in ignorance of A's mistake makes a contract which binds A.1 If A means to sell lot one, but by mistake he makes an offer to sell lot two, and B accepts such offer in good faith, A can not have such contract reformed so as to set forth the number of the lot which he intended to sell.2 The fact that the offeror did not intend to make an offer concerning the subject-matter which is pointed out by the offeror's authorized agent as that concerning which the offer was made, does not amount to mistake and does not prevent the existence of a con tract.3 If communication is made in cipher, or in accordance with a code, and by reason of the use of the wrong code word the offeror makes an offer that he did not mean to make, the acceptance on the part of the offeree without knowledge of such mistake con eludes the contract.4 If a railway company has published freight rates in the belief that it is not bound to do a regular freight business between two points in the same city, it can not charge a higher rate for such service than the rate which it has published.5 If a property owner agrees to pay for an excavation, he can not avoid liability on the theory that he intended to provide for excavation to the established grade and not for excavation to the actual grade.6
5 Equitable Mfg. Co. v. AHen, 70 Vt. 22, 56 Atl. 87.
6 J. I. Case Threshing Machine Co. v. Southwestern Veneer Co., - Ark. - , 205 S. W. 978.
7 Eau Claire Canning Co. v. Western Brokerage Co., 213 111. 561, 73 N. E. 430.
1 Georgia, Newsome v. Harrell, 146 Ga. 139, 90 S. E. 855.
Iowa. Stromberg v. Alexander, 171 la. 707, 154 N. W. 414.
Kansas. Cargill Commission Co. v. Mowery, 99 Kan. 389, 161 Ac. 634
[modified on rehearing 99 Kan. 389, 162 Ac. 313].
Kentucky. Crescent Coal Co. v. Louisville & N. Ry„ 143 Ky. 73, 33 L. R. A. (N.S.) 442, 135 S. W. 768.
Vermont. Taplin v. Clark, 89 Vt. 226, 95 Atl. 491.
Washington. Kelley v. Smith, 101 Wash. 475, 172 Ac. 542.
2 Stromberg v. Alexander, 171 Ia. 707, 154 N. W. 414.
3 Taplin v. Clark, 89 Vt. 226, 95 Atl. 491.
Belief will not be given if the written contract which is executed and delivered expresses the real understanding of one of the parties thereto and if it is accepted by the other, although such other party understood that such contract would contain different terms.7 The fact that such mistake was shared by the agent of the party against whom relief was sought, does not entitle the mistaken party to relief if such agent had no authority to bind his principal by such provisions, but merely had authority to solicit applications, upon which a contract would be issued.8