Opinion ID: 2204851
Heading Depth: 4
Heading Rank: 2

Heading: Kingik bore the risk of her unilateral mistake.

Text: Kingik argues that she is entitled to void the waiver because she was mistaken as to its basic assumption  that signing it would affect her right to receive survivor benefits. The Restatement (Second) of Contracts § 154 explains that a party bears the risk of the mistake when: (a) the risk is allocated to him by agreement of the parties; or (b) he is aware, at the time the contract is made, that he has only limited knowledge with respect to the facts to which the mistake relates but treats his limited knowledge as sufficient; or (c) the risk is allocated to him by the court on the ground that it is reasonable under the circumstances to do so. [16] Kingik argues that she does not bear the risk of her mistake under Restatement § 154(b) and (c). Regarding subsection (b), she argues she was not aware that she had only limited knowledge with respect to the facts to which the mistake related because she believed she was waiving one thing when she purportedly waived another. The Division counters that Kingik bore the risk of the mistake because she acted with what she knew was limited knowledge but treated that knowledge as sufficient. Kingik's admission that she [m]ost likely did not read the waiver form or other parts of Welch's retirement application undermines her ability to claim mistake as a defense. If she did not read the waiver, she must have known she was acting with limited knowledge of the contents and meaning of the contract, yet her signature indicates that she treated her knowledge of it as sufficient. Under these circumstances, the law requires that Kingik bear the risk of her mistake. Kingik also argues that the risk of error should be allocated to the Division under Restatement § 154(c) because it was the Division's duty to appropriately inform [Welch] of his rights, and because it is the Division's forms which caused the mistake in this case. We have subscribed to the principle that the risk of mistake should be borne by the party who has the greater interest in the consequences of a contract term. [17] The Division had no financial interest in Welch's election because its liability under each option was actuarially equal. The superior court observed that [i]t seems fair to say that the information about what rights were being waived was of great importance to [Kingik] while of lesser importance to [the Division], so under the facts of this case, the risk of mistake should be assigned to [Kingik]. Given the relative disparity in the parties' interests, we agree that Kingik properly bore the risk of her unilateral mistake.