Delaware Business Litigation Report

Delaware Superior Court Explains When Mutual Mistake Voids A Contract

659 Chestnut LLC v. Parke Bancorp Inc., C.A. N17-05-114 MMJ (December 6, 2018)

This is an interesting decision because it deals with the rare instance when a party can prove a mutual mistake as to a contract’s terms so as to avoid having to comply with those terms. Here both a borrower and a loan officer clearly agreed a loan could be repaid without penalty. The actual loan documents had a prepayment penalty that the borrower did not read before signing. The Court held the borrower was excused from catching that penalty clause given the assurance he had there was no prepayment penalty.

Share