2020 Georgia Code
Title 23 - Equity
Chapter 2 - Grounds for Equitable Relief
Article 2 - Accident and Mistake
§ 23-2-22. Mistake of Law in Instrument by Contracting Parties

An honest mistake of the law as to the effect of an instrument on the part of both contracting parties, when the mistake operates as a gross injustice to one and gives an unconscionable advantage to the other, may be relieved in equity.

(Orig. Code 1863, § 3055; Code 1868, § 3067; Code 1873, § 3122; Code 1882, § 3122; Civil Code 1895, § 3979; Civil Code 1910, § 4576; Code 1933, § 37-204.)

- For annual survey of recent developments, see 38 Mercer L. Rev. 473 (1986).

Equity will relieve against mutual mistake, but only at the instance of a complainant who moves with reasonable diligence. What is a reasonable time must necessarily depend upon the peculiar facts and environments of the particular case. Parker v. Fisher, 207 Ga. 3, 59 S.E.2d 715 (1950).

O.C.G.A. § 23-2-22 was inapplicable to a company's counterclaim to recover payments under a purchase agreement as O.C.G.A. § 23-2-22 offered relief following a mistake of law; the company made the payments in ignorance of the law and O.C.G.A. § 13-1-13 prohibited recovery of the payments voluntarily made in ignorance of the law. Wallis v. B & A Construction Co., 273 Ga. App. 68, 614 S.E.2d 193 (2005).

- Because a mutual mistake of law was not a valid reason to nullify the parties' choice of Delaware law in order to uphold a right of first refusal, the parties' settlement agreement was not subject to reformation due to an alleged mutual mistake. Thus, under Delaware law, the right was properly declared invalid under the rule against perpetuities. CS-Lakeview at Gwinnett, Inc. v. Simon Prop. Group, Inc., 283 Ga. 426, 659 S.E.2d 359 (2008).

Parol evidence can be offered to prove mistake. Vann v. Williams, 165 Ga. App. 457, 299 S.E.2d 908 (1983).

- See Posey v. Medical Center-West, Inc., 257 Ga. 55, 354 S.E.2d 417 (1987) (release of tortfeasor from liability).

- In certifying certain questions to the Georgia Supreme Court, the federal Court of Appeals concluded that it is an open question of Georgia law whether a person injured by a municipality has a beneficial interest in the municipality's liability contract sufficient to provide standing to seek reformation. Florida Int'l Indem. Co. v. City of Metter, 952 F.2d 1297 (11th Cir. 1992), aff'd, 984 F.2d 1138 (11th Cir. 1993).

- After an insured signed a general release believing that the release would not affect the insured's claim against the insured's underinsured motorist carrier, reformation of the release would be warranted if mutual mistake of law could be proved. Superior Ins. Co. v. Dawkins, 229 Ga. App. 45, 494 S.E.2d 208 (1997).

- Despite a payee's argument that a reformation claim could not have previously been filed because neither party foresaw that a contract claim could have been disposed of as it was, that argument was rejected as spurious, and because this argument ignored the fact that the payee filed a prior quantum meruit claim, which was predicated on the lack of an enforceable contract; hence, the payor obviously anticipated that the contract might not be entirely enforceable, and having done so, could have recognized the need to bring a reformation claim in the earlier action. ChoicePoint Servs. v. Hiers, 284 Ga. App. 640, 644 S.E.2d 456 (2007), cert. denied, No. S07C1166, 2007 Ga. LEXIS 499 (Ga. 2007).

Cited in State Highway Dep't v. Fidelity & Deposit Co., 168 Ga. 288, 147 S.E. 522 (1929); Sapp v. Ritch, 169 Ga. 33, 149 S.E. 636 (1929); Gibbs v. H.T. Henning Co., 189 Ga. 675, 7 S.E.2d 238 (1940); Hutchinson v. King, 192 Ga. 402, 15 S.E.2d 523 (1941); Miller v. Shaw, 212 Ga. 302, 92 S.E.2d 98 (1956); Stein Steel & Supply Co. v. K. & L. Enters., Inc., 97 Ga. App. 71, 102 S.E.2d 99 (1958); Seaboard Constr. Co. v. Clifton, 121 Ga. App. 247, 173 S.E.2d 436 (1970); Atkinson v. Atkinson, 254 Ga. 70, 326 S.E.2d 206 (1985); Fulghum v. Kelly, 255 Ga. 652, 340 S.E.2d 589 (1986).

RESEARCH REFERENCES

Am. Jur. 2d.

- 27 Am. Jur. 2d, Equity, §§ 36 et seq., 40 et seq.

- Mistake in lease as ground for relief, 26 A.L.R. 472.

Right to reformation of conveyance as depending upon consideration, 69 A.L.R. 423; 128 A.L.R. 1299.

Mistake as to law of another state or country as one of law or of fact, 73 A.L.R. 1260.

Avoidance on ground of fraud, mistake, duress, or mental incompetency of otherwise validly effected change of beneficiaries of insurance policies, 105 A.L.R. 950.

Misrepresentation as to matters of foreign law as actionable, 24 A.L.R.2d 1039.

Negligence in executing contract as affecting right to have it reformed, 81 A.L.R.2d 7.