On Mistake In Contract Law

As the process of specialization of social division and development of transaction carrieson, the function of contract becomes more irreplaceable in our modern world. The conclusionof a contract is always based on the party’s cognition and expectation of the objective world.Whether a party has the cancellation right when a contract is concluded by hismisunderstanding becomes one of the most difficult issues in the discussion of the contractlaw. This paper discusses mistake in contract law from the perspective of interpretative theory.The first part of this text focuses on the course of the forming of intent-indication, toaccurately locate the position of a mistake, analyze the state of interests between the parties,and explain and implement the provisions of the current law.The second part focuses on the premise of the application of the mistake system, theinterpretation of the contract. Only if we make a reasonable interpretation of the contract, canwe determine the contents of the contract.The third part focuses on the constitutive elements of a mistake. There are twoconstitutive elements of a mistke: First a party misunderstand the content of a contract whenentering into it; Second, the error must be important.The fourth part focuses on mistakes in expression and the transmission error. Chinesecivil law does not make provision for mistakes in expression and the transmission error. Thispaper argues that in the case of mistakes in expression and the transmission error, the partyhas the right to rescind the contract.The fifth part focuses on the expansion of the application of the mistake system-stylization of motivation error. Principle of good faith is the most fundamental principles ofcivil law, on which we should based in the stylization of motivation error.The sixth part is the conclusion, a brief summary for the above discussion.