Contract is valid if a man due to his own negligence or lack of reasonable care does not ascertain what he is contracting about, ,he must ,blame himself and cannot avoid the contract. Thus as rule, an unilateral mistake is, not ,allowed as a defence in avoiding. The contract i. e., it has no’ effect on the contract and the contract remains valid.
Illustration:(a) Where the government sold by auction the right of fishery and the plaintiff offered the highest bid thinking that the right was sold for three years, when in fact it was for one year only, he could not avoid the contract because it was his unilateral mistake caused by his own negligence. He ought to have ascertained the tenure of fishery before bidding at the auction (A.A. Singh vs ‘Unon of India).
Contract voidable. If the unilateral mistake is caused by fraud or misrepresentation, etc., on the part of the other party, the contract is void-able and can be avoided by the injured, party.
Illustration. A, has a horse with a’ hole in the hoof. A, so fills it up that the defect cannot be discovered on a reasonable examination. B. purchases the horse under the impression that the horse is sound. Here A, is guilty of fraud and as such on discovery of the defect B can avoid the contract because his unilateral mistake has been caused by A’s fraud
Agreement void ab-initio. In the following two cases, where the con-sent is given by a party under a mistake which is so fundamental as goes to the root of the agreement and has the effect of nullifying consent, no contract will arise even though there is a unilateral mistake only:
1. Mistake as to the identity _contracted with. where such identity is important. The rule of law is that a contract apparently made between A and C is a complete nullity, if the inference from the faces is that to the knowledge of C, it was the intention of A to contract only with B, for, there can be no real formation of an agreement by proposal and acceptance unless a proposal is accepted by the person to whom it is made. Thus, whenever the identity of the person with whom one intends to contract is important element of the contract, a mistake with regard to the person contracted with destroys his consent and consequently annuls the contract. Identity of person contracted ‘with is important either when there is a credit deal or when one party has a set-off agilest the other party. It is important to note that in case of mistake as to identity of person contracted with, even if the mistake is committed because of fraud or misrepresentation of another party, the contract is not merely voidable but is absolutely void.
Further, “mistakes to the identity” of a party is to be distinguished from “mistake as to the attributes” of the other party. Mistake as to attributes, for example, as to the solvency or social status of that person, cannot negative the consent. It can only Vitiate consent.. It, therefore, makes the’ contract merely voidable for fraud. Thus where X enters into a contract ‘with’ Y , falsely representing himself to be a richman, the contract is only voidable at the option of Y. Again where the identity of the party contracted with is. immaterial, mistake as to identity will not avoid a contract. Thus if X enters a shop, introduces himself as Y and purchases some goods for cash, the contract is valid.
2. Mistake as to the nature and character of a written document. The second circumstances which even an unilateral mistake may make a ‘ con-tract absolutely void is where the consent is given by a party under a mistake as to the nature and character of a written document. The rule of law is that where the mind of the signer did not accompany the signature; i. e., he did not intend to sign; in contemplation of law, he never did sign the contract to which his name is appended and the agreement is void ab-initio.
Illustrations :(a) An old illiterate woman executed a deed under the impression that she was executing a power of attorney authorising her nephew to manage her estate, while in fact it was a deed of gift in favour of her nephew. The evidence showed that the woman never intended to execute such a deed of gift nor was the deed read or explained to her. The document was held to be void, as her mind did not go with her signature (Bala Devi vs Santi Mazllmda).
(b) A blind man signed what he thought was a compromise petition, but was in fact a release, on the fraudulent representation of another, the document was held to be void (Hem Singh vs Bhaar).
It should be borne in mind that in the aforesaid type of mistake, even if one party’s consent is induced by misrepresentation of another, the con-tract is not merely voidable but is entirely void and the third party would acquire no rights (Ningawwa vs Byrappa).
Illustration:(a) Where the government sold by auction the right of fishery and the plaintiff offered the highest bid thinking that the right was sold for three years, when in fact it was for one year only, he could not avoid the contract because it was his unilateral mistake caused by his own negligence. He ought to have ascertained the tenure of fishery before bidding at the auction (A.A. Singh vs ‘Unon of India).
Contract voidable. If the unilateral mistake is caused by fraud or misrepresentation, etc., on the part of the other party, the contract is void-able and can be avoided by the injured, party.
Illustration. A, has a horse with a’ hole in the hoof. A, so fills it up that the defect cannot be discovered on a reasonable examination. B. purchases the horse under the impression that the horse is sound. Here A, is guilty of fraud and as such on discovery of the defect B can avoid the contract because his unilateral mistake has been caused by A’s fraud
Agreement void ab-initio. In the following two cases, where the con-sent is given by a party under a mistake which is so fundamental as goes to the root of the agreement and has the effect of nullifying consent, no contract will arise even though there is a unilateral mistake only:
1. Mistake as to the identity _contracted with. where such identity is important. The rule of law is that a contract apparently made between A and C is a complete nullity, if the inference from the faces is that to the knowledge of C, it was the intention of A to contract only with B, for, there can be no real formation of an agreement by proposal and acceptance unless a proposal is accepted by the person to whom it is made. Thus, whenever the identity of the person with whom one intends to contract is important element of the contract, a mistake with regard to the person contracted with destroys his consent and consequently annuls the contract. Identity of person contracted ‘with is important either when there is a credit deal or when one party has a set-off agilest the other party. It is important to note that in case of mistake as to identity of person contracted with, even if the mistake is committed because of fraud or misrepresentation of another party, the contract is not merely voidable but is absolutely void.
Further, “mistakes to the identity” of a party is to be distinguished from “mistake as to the attributes” of the other party. Mistake as to attributes, for example, as to the solvency or social status of that person, cannot negative the consent. It can only Vitiate consent.. It, therefore, makes the’ contract merely voidable for fraud. Thus where X enters into a contract ‘with’ Y , falsely representing himself to be a richman, the contract is only voidable at the option of Y. Again where the identity of the party contracted with is. immaterial, mistake as to identity will not avoid a contract. Thus if X enters a shop, introduces himself as Y and purchases some goods for cash, the contract is valid.
2. Mistake as to the nature and character of a written document. The second circumstances which even an unilateral mistake may make a ‘ con-tract absolutely void is where the consent is given by a party under a mistake as to the nature and character of a written document. The rule of law is that where the mind of the signer did not accompany the signature; i. e., he did not intend to sign; in contemplation of law, he never did sign the contract to which his name is appended and the agreement is void ab-initio.
Illustrations :(a) An old illiterate woman executed a deed under the impression that she was executing a power of attorney authorising her nephew to manage her estate, while in fact it was a deed of gift in favour of her nephew. The evidence showed that the woman never intended to execute such a deed of gift nor was the deed read or explained to her. The document was held to be void, as her mind did not go with her signature (Bala Devi vs Santi Mazllmda).
(b) A blind man signed what he thought was a compromise petition, but was in fact a release, on the fraudulent representation of another, the document was held to be void (Hem Singh vs Bhaar).
It should be borne in mind that in the aforesaid type of mistake, even if one party’s consent is induced by misrepresentation of another, the con-tract is not merely voidable but is entirely void and the third party would acquire no rights (Ningawwa vs Byrappa).
Validity of a contract under unilateral mistake
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