Ontario Mortgage Agent Practice Exam

What is a mistake in the context of a contract?

1. Condition Precedent

2. Mistake

3. Condition Subsequent

4. Acceptance

The correct answer is: Mistake

A mistake in the context of a contract refers to an error or misunderstanding made by one or both parties involved. This can occur during the negotiation or drafting process, or it can be a misunderstanding of the terms or conditions outlined in the contract itself. This answer, B, is correct because it directly relates to the concept of a mistake in a contract. Option A, a condition precedent, refers to a clause in a contract that states certain actions must be taken or certain events must occur before the contract becomes binding. This is not the same as a mistake, which is an error made in the process of forming the contract. Option C, a condition subsequent, refers to a clause in a contract that outlines certain circumstances that would cause the contract to end or be terminated. This is also not the same as a mistake, which refers to a misunderstanding or error in the contract itself. Option D, acceptance, refers to the mutual agreement of both parties to the terms and conditions outlined in the contract. While a mistake in the contract may affect the acceptance of the contract, it is not the same as acceptance itself.