{"id":3963,"date":"2020-03-15T15:04:13","date_gmt":"2020-03-15T15:04:13","guid":{"rendered":"https:\/\/commerceiets.com\/?p=3963"},"modified":"2020-03-15T15:04:13","modified_gmt":"2020-03-15T15:04:13","slug":"mistake-in-contract-law","status":"publish","type":"post","link":"https:\/\/commerceiets.com\/mistake-in-contract-law\/","title":{"rendered":"MISTAKE IN CONTRACT LAW"},"content":{"rendered":"\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_65 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/commerceiets.com\/mistake-in-contract-law\/#MISTAKE_IN_CONTRACT_LAW\" title=\"MISTAKE IN CONTRACT LAW\">MISTAKE IN CONTRACT LAW<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/commerceiets.com\/mistake-in-contract-law\/#EXCEPTIONS_OF_MISTAKE_OF_LAW\" title=\"EXCEPTIONS\nOF MISTAKE OF LAW\">EXCEPTIONS\nOF MISTAKE OF LAW<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/commerceiets.com\/mistake-in-contract-law\/#1_Bilateral_Mistake_%E2%80%93_Section_20\" title=\"1) Bilateral Mistake \u2013 Section 20\">1) Bilateral Mistake \u2013 Section 20<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/commerceiets.com\/mistake-in-contract-law\/#2_Unilateral_Mistake_-Section_21\" title=\"2) Unilateral Mistake -Section 21\">2) Unilateral Mistake -Section 21<\/a><\/li><\/ul><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/commerceiets.com\/mistake-in-contract-law\/#CONCLUSION\" title=\"CONCLUSION\">CONCLUSION<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"has-text-align-center wp-block-heading\"><span class=\"ez-toc-section\" id=\"MISTAKE_IN_CONTRACT_LAW\"><\/span><strong>MISTAKE IN CONTRACT LAW<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Mistake in contract law is a misconception or error. It means that parties intending to do one thing have by unintentional error done something else. Mistake may be defined as an erroneous belief about something. It refers to either one or both the parties to the contract are not properly understood matters relating to the contract and have done something wrong against their intention.<\/p>\n\n\n\n<p>The <a href=\"https:\/\/commerceiets.com\/indian-contract-act-1872\/\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\"Indian Contract Act,1872\u00a0 (opens in a new tab)\">Indian Contract Act,1872\u00a0<\/a>states two kinds of mistakes<\/p>\n\n\n\n<p>1) Mistake of Law(Section 21)<\/p>\n\n\n\n<p>2)&nbsp;Mistake of Fact(Section 20 &amp;22)<\/p>\n\n\n\n<p class=\"has-background has-text-align-center has-larger-font-size has-green-background-color\"><strong>MISTAKE OF LAW (SECTION 21)<\/strong><strong><\/strong><\/p>\n\n\n\n<p>The\nLatin maxim&nbsp;<strong><em>ignorantia juris non\nexcusat<\/em><\/strong>&nbsp;means that ignorance of the law is no excuse. Therefore under&nbsp;section 21&nbsp;of the&nbsp;<em>Indian Contract\nAct, 1872,<\/em>&nbsp;a contract cannot be said to be voidable due to the mistake\nof the parties in understanding any laws that are in force in India. Hence the\nparties to the contract cannot claim relief on the grounds that they were\nunaware of the India.<\/p>\n\n\n\n<p><strong>For\nExample<\/strong>, A\nman was caught by a ticket conductor for traveling on a train without a ticket.\nThe man cannot claim that he was not aware that a ticket is required while\ntraveling and shall be punished under&nbsp;Section 138&nbsp;of&nbsp;The Indian Railways Act, 1989.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"EXCEPTIONS_OF_MISTAKE_OF_LAW\"><\/span><strong>EXCEPTIONS\nOF MISTAKE OF LAW<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p><strong>1)&nbsp;Mistake\nwith regard to a Foreign Law<\/strong><\/p>\n\n\n\n<p><em>Section\n21<\/em>&nbsp;also specifies\nthat a mistake regarding a foreign law shall be treated as a mistake of fact.\nThis is because the parties to the contract are not expected to know all the\nprovisions of the foreign law and their meaning. Therefore in case of a mistake\nof the foreign law by both the parties, the contract will be considered void.<\/p>\n\n\n\n<p><strong>For\nExample,<\/strong>&nbsp;An\nIndian Company agrees to sell an American Company 200 cans of a certain mixture\ncontaining 45% Sulphuric acid. The law of the country had banned the purchase\nand sale of mixtures containing more than 30% Sulphuric acid. This is\nconsidered to be a mistake of foreign law and therefore the contract is said to\nvoid.<\/p>\n\n\n\n<p><strong>2)&nbsp;Mistake\nwith regard to a Private Right<\/strong><\/p>\n\n\n\n<p>The\nexistence of any private right is a matter of fact although depending on the\nrules of law because it is not possible for a party to fully know the private\nrights of another party.<\/p>\n\n\n\n<p><strong><em>CASE:\n<\/em><\/strong><strong><em>COOPER\nV PHIBBS (1867<\/em><\/strong><strong><em>)<\/em><\/strong><\/p>\n\n\n\n<p>The\nplaintiff took a lease of fishery right from the defendant unaware of the fact\nthat he already had a life interest in the fishery right. The plaintiff,\ntherefore, brought a suit for the cancellation of the lease and the defendant\nargued that this was a mistake of law.&nbsp;It was held that a mistake as to the general ownership or right stands on\nthe same footing as a mistake of law and therefore was declared void.<\/p>\n\n\n\n<p class=\"has-background has-text-align-center has-larger-font-size has-green-background-color\"><strong>MISTAKE OF FACT (SECTION 20 &amp; 22)<\/strong><\/p>\n\n\n\n<p>The\nmaxim&nbsp;<strong><em>Ignorantia Facti Excusat<\/em><\/strong>which&nbsp;means that the\nIgnorance of fact excuses. Therefore under&nbsp;Section 20&nbsp;of the&nbsp;Indian Contract Act, 1872<em>,<\/em>&nbsp;a\ncontract is said to be void when both the parties to the agreement are under a\nmistake as to a matter of fact.<\/p>\n\n\n\n<p><strong>A\nmistake of Fact can be of two kinds-<\/strong><\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"1_Bilateral_Mistake_%E2%80%93_Section_20\"><\/span><strong><em>1) Bilateral Mistake \u2013 Section 20<\/em><\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>Section 20&nbsp;will only apply when the following three conditions are\nfulfilled:<\/p>\n\n\n\n<p>1)The mistake must be\ncommitted by both the parties i.e must be mutual<br \/>\n2)The mistake must be regarding some fact.<br \/>\n3)It must relate to a fact which is essential to the contract.<\/p>\n\n\n\n<p>Therefore\nif the mistake is made regarding the existence of the subject matter or a fact\nessential to the contract, it would be a void contract since there is&nbsp;no <strong><em>consensus\nad idem.<\/em><\/strong><\/p>\n\n\n\n<p><strong>Types\nof Bilateral Mistakes<\/strong><\/p>\n\n\n\n<ul><li><strong>Mistake\nregarding the existence of the subject matter<\/strong><\/li><\/ul>\n\n\n\n<p>Sometimes\nthe existence of the subject matter of the contract ceases to exist before the\nagreement was made and the parties to the contract may not be aware of this\nfact. If the subject matter on which the contract exists is not present, it is\nconsidered that the contract has perished and hence the agreement would be\nconsidered void.<\/p>\n\n\n\n<p><strong><em>CASE:\nGALLOWAY VS. GALLOWAY(1914)<\/em><\/strong><\/p>\n\n\n\n<p>A\nman and woman believed that they were married and therefore made a separation\nagreement but it was later discovered that the man\u2019s first wife was\nalive.&nbsp;It was held that the\nseparation agreement was void as it had been entered into on the basis of the\ncommon assumption that the parties were married to each other.<\/p>\n\n\n\n<ul><li><strong>Mistake\nregarding the quality of the subject matter<\/strong><\/li><\/ul>\n\n\n\n<p>If\nthe parties to the contract are not mistaken regarding the subject matter of\nthe contract but regarding its quality, the contract would be said to be valid.<\/p>\n\n\n\n<p><strong>CASE:\u00a0SMITH VS HUGHES(1870)<\/strong><\/p>\n\n\n\n<p>The plaintiff agreed to buy certain Oats from the defendant\nbelieving that they were old when in reality they were new.&nbsp;It was held that the defendant cannot avoid\nthe contract on the ground that he was mistaken as to the oldness of the oats.<\/p>\n\n\n\n<ul><li><strong>Mistake\nregarding the quantity of the subject matter<\/strong><\/li><\/ul>\n\n\n\n<p>If\nboth the parties to the contract are under a mistake as to the quantity of the\nsubject matter, the agreement is said to be void.<\/p>\n\n\n\n<p><strong>For\nExample<\/strong>,\nAnkita agreed to buy a car from Prankur based on his letter in which the price\nmentioned was 50,000 instead of 5 lakhs due to a typing error. The said\nagreement is considered void due to a mistake as to the quantity of the subject\nmatter.<\/p>\n\n\n\n<ul><li><strong>Mistake\nregarding the title of the subject matter<\/strong><\/li><\/ul>\n\n\n\n<p>Sometimes\nthe buyer of said property or good may already be the owner of what the seller\nwishes to sell. Both the parties here might be under a mutual mistake as to the\ntitle of the said good or property. Since in such a case there is nothing that\nthe seller can transfer, there is no contract which subsequently becomes void. <\/p>\n\n\n\n<p><strong><em>CASE:\n<\/em><\/strong><strong><em>COOPER\nV PHIBBS (1867<\/em><\/strong><strong><em>)<\/em><\/strong><\/p>\n\n\n\n<p>The\nplaintiff took a lease of fishery right from the defendant unaware of the fact\nthat he already had a life interest in the fishery right. The plaintiff, therefore,\nbrought a suit for the cancellation of the lease and the defendant argued that\nthis was a mistake of law.&nbsp;It was\nheld that a mistake as to the general ownership or right stands on the same\nfooting as a mistake of law and therefore was declared void.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"2_Unilateral_Mistake_-Section_21\"><\/span><strong><em>2) Unilateral Mistake -Section 21<\/em><\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>Section 21&nbsp;of the act says that a contract cannot be said to be\nvoidable just because one of the parties to the contract was under a mistake as\nto a matter of fact concerned to the contract. Therefore a unilateral mistake\ndoes not affect the validity of the contract and cannot be a ground for setting\naside the contract in the court of law.<\/p>\n\n\n\n<p><strong><em>CASE:\n<\/em><\/strong><strong><em>TAPLINE VS\nJAINEE (1880)<\/em><\/strong><\/p>\n\n\n\n<p>The\nbuyer at an auction brought a property described with reference to a plan. The\nbuyer was under the assumption that he was well versed with the property and\ntherefore did not refer to the plan. Later he discovered that a garden plot\nwhich he thought was a part of the property was not in fact included in the\nplan. It was held that the buyer cannot revoke the contract on the grounds of\nthe unilateral mistake made by him and was bound by the contract.<\/p>\n\n\n\n<p><strong>Exceptions\nto a Unilateral Mistake<\/strong><\/p>\n\n\n\n<p>In\ncase of a unilateral mistake, the contract can only be avoided if it is proved\nthat the contract was caused due to fraud or misrepresentation on the part of\none of the parties to the contract.<\/p>\n\n\n\n<ul><li><strong>Mistake\nby one party as to the nature of the contract<\/strong><\/li><\/ul>\n\n\n\n<p>When\na mistake is made by one of the parties regarding the very nature of the\ncontract being entered into and such a mistake is known to the other party,\nsuch a contract is said to be void.<\/p>\n\n\n\n<p>This\nmay happen because while executing a contract, a party may not understand the\nnature of the contract he is entering into either due to fraud or\nmisrepresentation by the other party or due to the old age or ill health of the\nperson consenting to such a contract.<\/p>\n\n\n\n<p><strong>CASE: <em>DULARIA DEVI V. JANARDAN SINGH(1990)<\/em><\/strong><\/p>\n\n\n\n<p>An\nilliterate woman put her thumb impression on two documents thinking that both\nof them were to gift some property to her daughters. Later she discovered that\nthe second document was to defraud her out of more of her property. Although\nthis was a unilateral mistake on the part of the illiterate woman yet since the\nconsent for the said agreement was gained by fraud and the woman was not aware\nof the nature of the transaction,&nbsp;the\ncontract was held void by the courts.<\/p>\n\n\n\n<ul><li><strong>Mistake\nby one party regarding the identity of the parties to the agreement<\/strong><\/li><\/ul>\n\n\n\n<p>Generally,\nthe identity of the parties entering into an agreement is not essential to a\ncontract. But in certain cases, when a unilateral mistake is made regarding the\nidentity of the parties to the agreement due to misrepresentation by one party\nwho claims himself to be someone who he really is not, In such cases the\nagreement is said to be void<\/p>\n\n\n\n<p><strong><em>CASE: CUNDY V\nLINDSAY (1878)<\/em><\/strong><\/p>\n\n\n\n<p>Lindsay &amp; Co were\nmanufacturers of linen handkerchiefs amongst other things who received an order\nof 250 Dozen handkerchiefs from a man named Blenkarn, who imitated the\nsignatures of \u201cBlenkiron &amp; Co.\u201d a reputed firm located at \u201c123, Wood\nStreet\u201d. The man further mentioned his address to be at 37, Wood Street,\nCheapside. Lindsay and Co assumed that the order was from the reputed firm located\nat Wood-street and thus delivered the order. Later the man sold the goods to an\ninnocent party, Cundy. When Blenkarn failed to pay for the said order Lindsay\n&amp; Co sued Cundy for the goods. Lindsay and Co claimed that since they sold\nthe goods to Blenkarn under the mistaken assumption that they were selling it\nto Blenkiron &amp; Co, there was no real consent to the contract of sale.<\/p>\n\n\n\n<p>It was held that there was a unilateral mistake by\nthe claimants regarding the identity of the other party making the contract void\nand hence the title of the goods did not pass to Blenkarn, and therefore could\nnot have passed to Cundy who was liable to return the goods back to Lindsay and\nCo.<\/p>\n\n\n\n<h2 class=\"has-text-align-center wp-block-heading\"><span class=\"ez-toc-section\" id=\"CONCLUSION\"><\/span><strong>CONCLUSION<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The validity of a contract is hindered when <a rel=\"noreferrer noopener\" aria-label=\"consent (opens in a new tab)\" href=\"https:\/\/commerceiets.com\/free-consent-in-contract\/\" target=\"_blank\">consent<\/a> is gained due to a mistake by the parties. When consent to a contract is gained due to a bilateral mistake of fact, the contract is said to be void but when the mistake occurs due to a unilateral mistake of fact, the agreement is valid except in the cases of mistake regarding the nature of the contract or identity of the parties to the contract. Similarly, when consent to a contract is gained due to a mistake of the Indian law it is a valid contract but if it is due a foreign law by both the parties, the contract is said to be void.<\/p>\n\n\n\n<p><strong>JOIN THE CHANNEL ON TELEGRAM<\/strong><\/p>\n\n\n\n<p><a href=\"https:\/\/t.me\/commerceiets\" target=\"_blank\">https:\/\/t.me\/commerceiets<\/a><\/p>\n\n\n\n<p><strong>CONNECT ON LINKEDIN<\/strong><\/p>\n\n\n\n<p><a href=\"https:\/\/www.linkedin.com\/in\/kajal-mahajan-7549b2197\/\" target=\"_blank\" rel=\"noopener\">https:\/\/www.linkedin.com\/in\/kajal-mahajan-7549b2197\/<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>MISTAKE IN CONTRACT LAW Mistake in contract law is a misconception or error. It means that parties intending to do one thing have by unintentional error done something else. Mistake may be defined as an erroneous belief about something. It refers to either one or both the parties to the contract are not properly understood&#8230;<\/p>\n<p class=\"more-link-wrap\"><a href=\"https:\/\/commerceiets.com\/mistake-in-contract-law\/\" class=\"more-link\">Read More<span class=\"screen-reader-text\"> &ldquo;MISTAKE IN CONTRACT LAW&rdquo;<\/span> &raquo;<\/a><\/p>\n","protected":false},"author":2,"featured_media":3965,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"_links":{"self":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/posts\/3963"}],"collection":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/comments?post=3963"}],"version-history":[{"count":0,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/posts\/3963\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/media\/3965"}],"wp:attachment":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/media?parent=3963"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/categories?post=3963"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/tags?post=3963"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}