What is Mistake in law?

Mistake may be defined as an erroneous belief concerning something. It may be of two kinds:

1. Mistake of law.

2. Mistake of fact.

Mistake of Law

Mistake of law may be of two types:

(a) Mistake of law of the country;

(b) Mistake of foreign law.

(a) Mistake of law of the country or Mistake of law. Every one is deemed to be conversant with the law of his country, and hence the maxim “ignorance of law is-no excuse.” Mistake of law, therefore, is no excuse and It does not give right to the parties to avoid the contract Stating the effect of mistake as to law, Section 21 declares that “a contract is not voidable because it was caused by a mistake as to .any law in force in India. Accordingly, no relief can be granted on the ground of mistake of law of the country.

Illustration (To Sec. 21). A and B make a contract grounded on the erroneous belief that a particular debt is barred by the Indian Law of Limitation: the contract is not voidable (i.e., the contract is valid).

However, if one of the parties makes a ‘mistake of law’ through the inducement, whether innocent or otherwise, of the other party, the contract may be avoided

(b) Mistake of foreign law. Mistake of foreign law stands on the same footing as the ‘mistake of fact’. Here the agreement is void in case of ‘bilateral mistake’ only, as explained under the subsequent heading.

Mistake of Fact

Mistake of fact may be of two types:

i. Bilateral mistake; or

ii. Unilateral mistake.

1. Bilaterial mistake. Where the parties to an agreement misunderstood each other and are at cross purposes, there is a bilateral mistake. Here there is no real correspondence ‘of offer acceptance, each party obviously understanding the contract in a different way. In fact in such cases, there is no agreement at all, there being entire absence of consent. This has been termed by Salmond as ‘error in consensus as distinguished from ‘error in causa’ (i.e. where consent is not free and is caused by coercion, undue influence, misrepresentation or fraud). In case .of bilateral mistake of essen-tial fact, the agreement is void ab-initio. Section 20 provides that “where both the parties. to an agreement are under a mistake as to a matter of fact essential to the agreement, the agreement is void Thus for declaring an agreement void ab-inito under this Section, the following three conditions must be fulfilled

(i) Both the parties must be under a mistake i.e., the mistake must be mutual. Both the parties should misunderstand each other so as to nullify consent.

Illustration M, having two houses A and B, offers to sell house A, and N not knowing that M has two houses, thinks of house B and agrees to buy it. Here there is no real consent and the agreement is void.

(ii) A stake must relate to some fact and not to judgement or opinion etc. An erroneous opinion as to the value of the thing which forms the subject-matter of the agreement is not to be deemed a mistake as to a matter of fact (Explanation to Section 20)

Illustration

(i) If A buys a motorcar, thinking that it is worth Rs 80,000, and pays Rs. 80,000 for it, when it is only worth Rs 40,000, the contract remains good. A has to blame himself for his ignorance of the true value of the motorcar and he cannot avoid the contract on the ground of mistake.

2. Unilateral mistake. Where only cine of the contracting parties is mistaken as to a matter of fact, the mistake is a unilateral mistake. Regard-ing the effect of unilateral mistake .on the validity of a contract, Section 22 provides that “a contract is not voidable merely because it was caused by one of the parties to it being under a mistake as to a matter of fact.” Accord-ingly, in case unilateral mistake a contract remains valid unless the mistake is caused by misrepresentation or fraud, in which case the contract is voidable at t e option of aggrieved art. n t e basis of judicial deci-sions, however, in certain exceptional cases even an unilateral mistake, whether caused by fraud, misrepresentation, etc., or otherwise, may make an agreement void ab-intio.