When a Landlord Mistakes the Rent Amount: What Happens to the Contract?

Contracts, particularly those related to property and leases, form the foundation of agreements between tenants and landlords. In many cases, a minor error, like a misplaced decimal, can create complex legal issues. For example, if a landlord mistakenly lists the rent as $75 instead of $750 on a lease, both parties sign without noticing the error, the validity of the contract becomes a critical question.

Understanding the Elements of a Valid Contract

A contract is generally considered valid if it meets certain conditions: mutual agreement, consideration, capacity, and legality. However, when there is a significant error in the terms of the contract, such as a substantial error in the rent amount, this can complicate matters.

Mutual Mistake and Unconscionability

In the scenario where the rent is mistakenly stated as $75 instead of $750, several factors come into play:

Mutual Mistake

When both parties were unaware of the mistake and intended for the rent to be $750, the error can be classified as a mutual mistake. In cases of mutual mistake, courts may allow for the contract to be reformed to reflect the true agreement. This is because both parties had a shared intention, which was reflected in the original terms of the lease.

Unconscionability

If the discrepancy between the two amounts is so large that it creates an unconscionable situation—where one party is significantly disadvantaged—a court may find that the contract is unenforceable as written. In such cases, the contract may be reformed or rescinded to remove the inequity, ensuring that justice is served.

For instance, if a tenant agrees to a lease for $75 because of a landlord's error, and can afford the higher amount of $750, engaging in legal battles over the $75 rent could be seen as an unreasonable and unfair burden on the tenant.

Intent of the Parties

The intent of the parties is another crucial factor. If evidence shows that both parties intended for the rent to be $750, the landlord may still have a strong case to enforce the lease at that amount. This can be demonstrated through correspondence, emails, or other communication indicating the correct rent amount.

State Laws and Precedents

Contract law can vary by state, so the specific jurisdiction may have additional rules or precedents that apply. For example, some states may have more lenient rules regarding mutual mistakes, while others may take a more rigid stance, insisting that all terms must be strictly adhered to.

Best Practices and Legal Advice

In practice, it is highly advisable for the landlord to communicate with the tenant about the error and seek to amend the lease. This not only clarifies the agreement but also avoids future disputes. If a dispute arises, consulting a legal professional is essential to navigate the specificities of the situation.

Even if the court admits that $75 is valid because it is in the contract, the landlord can easily find ways to terminate the lease for various violations, defeating the purpose and causing unnecessary complications. A fair and reasonable rent amount of $750 is more likely to be upheld and enforced by the courts, as it reflects the true intent of both parties.

Interestingly, most courts of law would agree that $750 is the fair and reasonable lease amount per month, despite the error on the leasing document. This is because the higher rent amount more accurately represents the mutual agreement.

In conclusion, if a landlord mistakenly lists the rent as $75 instead of $750, the subsequent actions of both parties will determine the validity of the contract. Mutual mistakes and unconscionability can play significant roles, and seeking legal advice is crucial to ensure that the true agreement is honored.