I. Mistake of Law
The Indian Contract Act, in contrast to many other legal systems, does not commonly acknowledge a mistake of law as a viable cause for avoiding a contract. Ignorance of the law is not seen as a valid justification among legal professionals. On the other hand, if a mistake of law is joined with an error of fact, it may affect the contract’s capacity to become legally binding. Mistake of Law may be of two types:
1. Mistake of Law of the Country: Mistakes of law, in contrast to mistakes of fact, do not often provide a solid basis for the nullification of a contract. The idea is reflected in Section 21 of the act, which provides that a contract is not voidable just because one of the parties was misinformed regarding the legislation of the nation. This provision is particularly relevant to the principle. Therefore, it is expected of the parties that they are aware of the legal consequences of their contracts, and ignorance of the law is often not regarded to be a viable justification for seeking relief from the duties that are imposed by the contract.
2. Mistake of Foreign Law: If a person takes part in a contract without being aware of any specific provisions of foreign law that are essential for that contract, then that mistake is treated as a mistake of fact. In simple terms, it means the contract becomes void if both parties are under a mistake as to foreign law because one cannot be expected to know the laws of foreign countries.
Mistake under Indian Contract Act, 1872
Mistake in general means something that does not work out in search of a solution. In law, misunderstanding about a material fact prevents the formation of a valid contract. Mistakes can play a big role in the construction of the legal landscape, which is a complex domain that encompasses the world of contracts. It is possible to make use of the Indian Contract Act 1872, which provides a comprehensive framework that may be used to study and deal with several aspects of contracts, including shortcomings. As per Section 10 of the Indian Contract Act 1872, the Free consent of parties is an essential element of any contract. Section 14 of the act states that ‘Free consent means consent not caused by coercion, undue influence, fraud, misrepresentation and mistake.’
Geeky Takeaways:
- Fraud involves intentionally misleading someone; whereas, Misrepresentation involves making mistakes in either knowledge or perception.
- Revocation is an important remedy that is accessible to parties who have been impacted by mistakes. It gives them the ability to terminate the contract and return to the position they were in before the contract was signed.
- If a mistake has been made, the courts have the authority to cancel contracts, which highlights the significance of legal involvement in the process of resolving contractual disputes.
- To avoid making mistakes and improve the legally binding nature of contracts, the parties involved should participate in due diligence, seek the opinion of legal professionals, and ensure that they communicate clearly.
Table of Content
- Mistake under Indian Contract Act, 1872
- I. Mistake of Law
- II. Mistake of Fact
- Conclusion
- Frequently Asked Questions (FAQs)