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  M.Com

 
  Syed Imad-ud-Din Asad

 
 Muhammad Mubashar ul Haq


 080345-001

  

 8/12/2010

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It is necessary for the creation of a valid contract that parties of the contract should agree to the

same thing and the same sense. If parties give their consent under any error, there is no

agreement. So valid contract should be free from any kind of mistake. It means there should be

consensus ad-idem. To understand the mistake the ³Consent´ must be understand Section 13

defines ³consent´ as follows:

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An agreement upon the same thing in the same sense is known as true consent or consensus ad-

idem, and is root at the root of the every contract.

This seems to have been picked up from a passage in the judgment of 
   



³It is essential to the creation of a contract that both parties should agree to the same thing in the

same sense. Thus if two persons enter into an apparent contract concerning a particular person or

ship, and it turns out that each of them, misled by a similarity of name, had a different person or

ship in mind, no contract would exist between them ( 



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·here the mistake does not defeat consent, but only misleads the parties, section 20 shall apply.

This section provides:

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Mistake can be divided into (1) mistake of fact and (2) Mistake of Law.

Kinds of Mistake

Mistake of Fact Mistake of Law

Bilateral Mistake Unilateral Mistake Foreign Law Mistake Pakistani Law Mistake

Mistake as to

As to Existence of Subject Matter

As to Identity of Subject Matter

As to Ownership of Subject Matter

As to Price of Subject Matter

As to Quantity of Subject Matter

As to Quality of Subject Matter


 

Ignorance or forgetfulness of the existence or non-existence of a fact important to the creation of

a legal obligation. In general, a party to a contract cannot plead discharge from its obligations

under the contract because it was mistaken in the terms of the contract. Any signed document

that does not correctly record what the signatories intended may be rectified by a court on

application by any one of its signatories. If a mistake of fact occurs in the proceedings of a case,

it is rectified by the court in which it occurred. Also called error of fact.?

Mistake of fact has following two kinds

O? Bilateral Mistake

O? Unilateral Mistake


 


According to Sec 30 : ³where both the parties to an agreement are under a mistake as to matter of

fact, essential to the agreement, there is a bilateral mistake and the agreement is void´

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O? Both the parties must be under a mistake

O? Mistake must relate to some fact

O? The fact must be essential to an agreement

Illustration: A agrees to sell B a specific cargo of goods supposed to be on its way from Saudi

Arabia to Karachi. It turns out that, before the day of bargain, the ship convening the cargo had

been cast away and the goods lost. Neither party was aware of this fact. The agreement is void.
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O? Mistake as to existence of subject matter

O? If both parties to contract are under mistake as to identity of subject matter the contract is

void.

O? If a person agrees to purchase the property, which already belongs to him but both the

parties are not aware of this fact, the agreement is void.

O? If both the parties are under mistake regarding price of subject matter then the agreement

will be void.

O? ·hen both the parties are under mistake regarding the quantity of subject matter the

agreement is void.

O? If the parties are under mistake as to the quality of subject matter then the agreement will

be void.

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·here only one of the contracting parties is as mistake it is a unilateral mistake. It is a

mistake of one party and does not under the contract voidable.

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If a person due to his own negligence makes a wrong contract he cannot avoid the contract.

Voidable Contract:
 If a unilateral mistake is caused by a fraud on the part o the other party, the contract is void

and can be avoid by the injured party.

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·here the identity of the contracting party is essential to the contract, the mistake make the

agreement void.


 

Following are the kinds of mistake of law

O? 
 



Mistake of law does not affect the validity of the contract.

Example: if someone is caught while travelling without ticket in train. He cannot be excused on

the ground that he was not aware that ticket is must for travelling.

#%"  A and B make a contract, which is based on erroneous belief that a particular debt is

barred by Pakistani Law of limitation, the contract is not voidable.

O? 
  


According to sec 21 of the contract act, a mistake as to a law not in force has the same

effect as the mistake of fact. The contract may be rendered void if both parties are under

mistake as to foreign law.

A, a Pakistani agrees to sell to B of foreign national, 100 bottles of certain mixture

containing 25% Sulphuric Acid. The law of that country has banned the sale and

purchase of any mixture containing more than 10% Sulphuric acid. This is the mistake of

foreign law. And the contract will be void.



   

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O? http://www.businessdictionary.com/definition/mistake-of-fact.

O? Law of Contract ( AVTAR SINGH)

O? Business Law Prof. Khalid Mehmood Cheema ( Local Edition )

O? www.google.com

O? www.wikipedia.com

O? Number of words 1034.