Mistake of Law

In one sentence

A misunderstanding about what the law says or requires, not about factual circumstances.

Plain English

A mistake of law happens when someone gets the rules wrong—like thinking a certain business practice is legal when it's actually prohibited, or misunderstanding what a contract term means under the law. Courts generally don't let you out of a contract just because you misunderstood the law, since everyone is presumed to know the law (even though that's often unrealistic). However, if both parties made the same mistake about the law, courts may sometimes provide relief.

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Example

You sign a non-compete agreement thinking it's unenforceable in your state, but it actually is enforceable. Your mistake about the law doesn't let you break the agreement without consequences.

Used in a sentence

“The defendant's mistake of law about tax regulations did not excuse him from paying the owed amount.”

Related terms

Mistake of Fact

A misunderstanding about something that actually exists or happened, rather than about the law itself.

Material Fact

A fact that significantly affects a party's rights, obligations, or decision-making in a contract.

Contract

A legally binding agreement between two or more parties to do or not do something.

Voidable Contract

A contract that one party can cancel or reject, but is otherwise valid.

Rescission

Unwinding a contract entirely, returning both parties to their positions before the deal.

Offer

A proposal to enter into a binding agreement on specific terms.

Acceptance

Agreeing to the exact terms of an offer, creating a binding contract.

Consideration

Something of value exchanged by each party to make a contract binding.

This page is a plain-English reference and is not legal advice. Laws vary by jurisdiction and change over time. For specific situations consult a licensed attorney.