Mistake of fact is a mistake not caused by the neglect of a legal duty on the part of the person making the mistake and consisting in:

1. (1) An unconscious ignorance or forgetfulness of a fact, past or present, material to the contract; or
2. (2) Belief in the present existence of a thing material to the contract which does not exist, or in the past existence of such a thing which has not existed.

Source: CivC 1877, § 888; CL 1887, § 3512; RCivC 1903, § 1206; RC 1919, § 821; SDC 1939, § 10.0312.