Unilateral Mistake and Survey of its Efficiency in Iranian and English Law

Effect of a “Unilateral Mistake” on the survival of a contract is one of the controversial subjects of Contract Law. In Iranian law, “a unilateral mistake” that has entered the realm of compromise and is about “the subject of the transaction itself” invalidates the contract, regardless of its effect on efficiency and allocation of resources. In English law, a unilateral mistake affects the life of the contract, which damages one of the basic elements of the contract and the other party is aware or should be aware of it. According to legal economic analysts, "unilateral mistake" should be examined in terms of efficiency and its impact on resource allocation, and "mistake" affects the fate of the contract if it prevents the realization of the allocated efficiency. Because in Iranian and English law, the rules governing "unilateral mistake" do not take into account whether the goods or services have been transferred to the person who values them the most, the allocated efficiency will not be achieved.