Comprehension

When parties to a contract are under a 'mistake' regarding an important fact related to such contract, it may affect the contract in two ways. It may, firstly, defeat the consent altogether that the parties are supposed to have given, that is to say, the consent is unreal. Two or more persons are said to consent when they agree upon the same thing in the same sense. Secondly, the mistake may mislead the parties as to the purpose which they had contemplated. Where the mistake does not defeat consent, but only misleads the parties, i.e., where both parties to an agreement are under a mistake as to a matter of fact essential to the agreement, the agreement is void. However, if the mistake is concerning an erroneous opinion regarding value of the subject-matter of the agreement, it is not a mistake as to a matter of fact. Thus, agreement is void when: (1) both the parties to an agreement are mistaken, (2) their mistake is as to a matter of fact, and (3) the fact about which they are mistaken is essential to the agreement. Further, it is pertinent to note that a mistake, in order to invalidate a contract, should be a mistake of fact and not a mistake of law. Furthermore, where only one party to the contract is under mistake of fact, and the other party is not, the contract is not voidable merely for such reason.

Question: 1

Mr. A entered into an agreement to sell his bicycle which had been kept unused in his attic for a year, to Mr. B, at an agreed price. However, neither party was aware that at the time of entering into the agreement, the bicycle had already been destroyed by a fire in the attic. In the given situation, which of the following statements is true?

Updated On: Aug 1, 2024
  • The agreement is void as both parties were under a mistake as to a matter of fact essential to the agreement.
  • The agreement is void as both parties were under a mistake as to a law in force in India.
  • The agreement is not voidable as only one of the parties was under a mistake as to a matter of fact.
  • The agreement is not voidable as the promise made under the agreement had not been performed.
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The Correct Option is A

Solution and Explanation

The correct option is (A): The agreement is void as both parties were under a mistake as to a matter of fact essential to the agreement.
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Question: 2

Ms. X and Ms. Y entered into a contract of sale of an article, while reeling under the erroneous belief that the sale of the article, which was the subject-matter of the agreement, was permitted by the law in force in India. In the given situation, which of the following statements is true?

Updated On: Aug 1, 2024
  • The contract is valid.
  • The contract is voidable at the option of Ms. X.
  • The contract is voidable at the option of Ms. Y.
  • The contract is not voidable.
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The Correct Option is D

Solution and Explanation

The correct option is (D): The contract is not voidable.
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Question: 3

Mr. J entered into an agreement with Mr. K for the sale of Mr. J's 'club'. At the time of entering into the agreement, while Mr. J believed that he was agreeing to sell his golf club, Mr. K believed that he was agreeing to buy a clubhouse owned by Mr. J. The agreement is void because:

Updated On: Aug 1, 2024
  • Mistake of fact defeated the consent of the parties.
  • Mistake of fact misled the parties as to the purpose of the contract.
  • Mistake of fact was regarding the identity of parties.
  • Both (A) and (B).
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The Correct Option is D

Solution and Explanation

The correct option is (D): Both (A) and (B).
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Question: 4

Mr. D appointed Mr. K to manage the cultivation of his land as he was unable to manage it himself due to his advanced age. Mr. K agreed to manage the cultivation of Mr. D's land if he granted Mr. K a lease of the said land. Mr. D agreed to the same and signed a deed which was, unknown to both parties, a gift deed of the land and not a lease deed. In the given situation, which of the following statements is true?

Updated On: Aug 7, 2024
  • Mr. D and Mr. K were reeling under a mistake as to a matter of fact essential to the agreement.
  • Mr. D and Mr. K were reeling under a mistake as to a matter of law essential to the agreement.
  • Mr. D was reeling under a mistake as to a matter of fact essential to the agreement.
  • Mr. D was reeling under a mistake as to a matter of law essential to the agreement.
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The Correct Option is A

Solution and Explanation

The correct option is (A): Mr. D and Mr. K were reeling under a mistake as to a matter of fact essential to the agreement.
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Question: 5

Ms. X and Ms. Y entered into a contract of sale of an article which was agreed to be shipped by Ms. X in a ship named 'The Cruiser' and delivered to Ms. Y on an agreed date. Mr. X shipped the said article by a different ship named 'The Mariner', without informing Ms. Y and the article was delivered to Ms. Y on the agreed date. In the given situation, which of the following statements is true?

Updated On: Aug 1, 2024
  • The agreement is void as both parties were under a mistake as to a matter of fact essential to the agreement.
  • The agreement is void as both parties were under a mistake as to a law in force in India.
  • The agreement is valid as both parties were under a mistake as to a matter of fact not essential to the agreement.
  • The agreement is valid as both parties were under a mistake as to a matter of fact essential to the agreement.
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The Correct Option is C

Solution and Explanation

The correct option is (C): The agreement is valid as both parties were under a mistake as to a matter of fact not essential to the agreement.
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