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18. Is the towing company's performance excused on the grounds of mistake?
During an ice storm, a man's car slipped down an embankment and became lodged against a large tree. The man called a towing company and told the company's manager that the car was 100 feet down the embankment. «That's lucky,» said the manager, «because our winch only goes 100 feet.» After the manager and the man agreed on a price, an employee of the company attempted to reach the car but could not because the car turned out to be 120 feet down the embankment.
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A is incorrect. In order for performance to be excused, there must be a mistake of fact, and not merely uncertainty. Here, both were mistaken about how far down the car was; this is beyond just being uncertain about the distance.
B is incorrect. Bearing the risk of a mistaken assumption requires one party to be in a better position to know the risks than the other party or if the parties knew the assumption was doubtful. Here, there is nothing that indicates the towing company knew better than the man.
D is incorrect. It is the correct conclusion but incorrect reasoning. Allocation of the risk of mistake does not have to be an explicit part of an agreement.