Claim for Mutual Mistake Cannot be Based on Incorrect Assumptions Regarding Future Events

On April 24, 2023, Justice Crane of the New York County Commercial Division issued a decision in Ashekian v. Cresco Labs LLC, 2023 NY Slip Op. 31347(U), holding that a claim for mutual mistake cannot be based on incorrect assumptions regarding future events, explaining:

At no point does Plaintiff allege what actually happened–that the parties anticipated, a regulatory framework different than what eventually occurred. The reason Plaintiff did not own up to this reality was calculated. This is because to allege mutual mistake, the mistake must exist at the time the contract is entered into arid must be substantial. Moreover, reformation based on mistake is not available where the parties purposely contract based upon uncertain or contingent events.

Here, at the time of contacting, the parties apparently anticipated a regulatory regime that never came to be. This is not a basis for mutual mistake.

The failure to anticipate the regulatory scheme here is no different and cannot constitute mutual mistake.

(Internal quotations and citations omitted).

Stay informed!
Sign up for email alerts and notifications here.
Read more about our Complex Commercial Litigation practice.