Where a mistake of both parties at the time the contract was made to a basic assumption on which the contract was made has a material effect on the agreed exchange of performances, then the contract is voidable at the option of the affected party.
For example, a customer goes to an interior decorator store to buy a carpet, and the salesman shows the buyer a navy blue colour carpet, which he subsequently buys and takes with him. Upon examining the carpet in daylight, the buyer discovers that the carpet is black. A mutual mistake would have occurred as both the buyer and seller were in error in selecting the correct colour of the carpet. Since there had never been a complete meeting of minds, no mutual assent arrived and hence, the buyer would have to return the carpet and exchange it with the right one or get a refund.