Mistake

Introduction

A mistake occurs when a party to an agreement holds an erroneous belief about a fact or law. Mistakes prevent free consent, affecting the validity of a contract. Indian law distinguishes between mistake of law and mistake of fact, with different consequences.

Meaning / Definition

A mistake is an erroneous belief about something material to the contract. When a contract is entered into under a mistake, consent is absent, and the agreement may be void or voidable depending on the type of mistake.

Modes or Types

Mistake of Law (Section 21)

• Mistake of Indian Law: Generally, ignorance of Indian law is no excuse. A contract is not voidable due to mistake of law in India.
• Mistake of Foreign Law: A person is not expected to know foreign laws. Mistake of foreign law is treated as a mistake of fact, which may void a contract.

Mistake of Fact (Section 20)

Mistake of fact can be bilateral or unilateral.

Bilateral Mistake

• Occurs when both parties are under a mistake about a fact essential to the agreement.
• Such agreements are void due to absence of consensus-ad-idem.
• Types:

1. Mistake as to Subject-Matter

   • Existence: Both believe a subject exists when it does not.
     Example: Cargo lost at sea before contract; parties unaware.
   • Identity: Parties have different items in mind.
     Example: A sells “old Delhi house,” B thinks it is “South Delhi house.”
   • Title: Mistaken belief about ownership.
     Example: Buyer already owns the property.
   • Quantity: Mistaken understanding of quantity.
     Case: Henked v. Pape – miscommunication about rifles; no contract for extra rifles.
   • Quality: Mistaken belief about quality or type.
     Example: Both believe horse is racehorse; actually a cart horse.
   • Price: Mutual mistake about price renders contract void.
     Note: Mistake about value (opinion) is not a mistake of fact.

2. Mistake as to Possibility of Performance

   • Physical impossibility: Contract cannot be physically performed.
     Case: Hiring room to view cancelled coronation (Griffith v. Esymsr).
   • Legal impossibility: Contract requires illegal act; void.

Unilateral Mistake (Section 22)

• Occurs when only one party is mistaken. Generally, contract is not voidable.
• Exceptions where unilateral mistake may void contract:
  1. Mistake about identity of the contracting party.
     Cases:
     • Cindy v. Lindsay – Mistaken identity; innocent buyer did not get title.
     • Lake v. Simmons – Misrepresentation of identity; contract void.
  2. Mistake as to the nature of the contract.
     Case: Foster v. Mackinnon – Illiterate man misled about signing a bill; contract void.

Important Case Law

• Henked v. Pape: Mistake in communication of quantity; agreement partially void.
• Griffith v. Esymsr: Hiring room to view cancelled event; contract void due to impossibility.
• Cindy v. Lindsay & Lake v. Simmons: Mistake of identity; contract void.
• Foster v. Mackinnon: Mistake as to nature of contract; contract void.

Distinction / Comparison

Practical Example

• A sells B a “Fiat car,” but B thinks it is a “Maruti car.” Both unaware of the mistake. Contract is void due to bilateral mistake about subject-matter.

Summary

• Mistake is an erroneous belief affecting consent to a contract.
• Mistake of law (Indian law) does not void a contract; foreign law treated as fact.
• Bilateral mistake: both parties mistaken about essential fact; contract is void.
• Unilateral mistake: generally contract valid; void if mistake affects identity or nature of contract.
• Subject-matter mistakes include existence, identity, title, quantity, quality, price.
• Possibility of performance mistakes include physical or legal impossibility.
• Aggrieved parties may rescind contract and recover advantages received by the other party.