Which of the following defines a "palpable mistake"?

A "palpable mistake" refers to a mistake that is clear and obvious, typically one that is apparent upon reasonable observation or investigation. This type of mistake affects the understanding or interpretation of a contract, leading to an outcome that does not reflect the true intent of the parties involved.

When a palpable mistake occurs, it is not just any error; it is significant enough that both parties are likely to recognize it as an error that can affect the contract's validity. This recognition is key because it indicates that the mistake can lead to misinterpretation of the terms by one or both parties, potentially justifying remedies such as rescission or reformation of the contract.

The other options do not capture the essence of a palpable mistake as precisely. A mistake that both parties are unaware of lacks the clarity or obviousness that typifies a palpable mistake. A misunderstanding shared equally by both parties does not imply that there is an obvious error that would warrant correction. Similarly, while a blunder may cancel a contract, not all palpable mistakes are so severe that they invalidate the agreement entirely; rather, they often lead to correction rather than cancellation.