Which type of mistake is characterized by only one party being mistaken about a fact?

A unilateral mistake occurs when only one party in a contract is mistaken about a fundamental fact. In such cases, the mistaken party holds a misunderstanding of an essential aspect of the agreement, which creates an imbalance in the contract. This type of mistake typically does not affect the validity of the contract unless the non-mistaken party was aware of the mistake and took advantage of it, or if the mistake was related to a very crucial fact that fundamentally affects the essence of the agreement.

In contrast, a bilateral mistake involves both parties having a shared misconception about a vital fact concerning the contract. Misrepresentation refers to a false statement made by one party that induces another party to enter into a contract but does not hinge on a mistaken belief about the contract's terms. Undue influence pertains to situations where one party exerts excessive pressure over another, compromising their ability to make free and informed decisions.

Thus, the concept of a unilateral mistake specifically captures the essence of a situation where only one party holds a mistaken belief about the facts surrounding the contract, making it the correct answer.