Monday, May 27, 2024

𝗝𝘂𝗱𝗶𝗰𝗶𝗮𝗹𝗗𝗿𝗲𝗮𝗺™

𝙰𝙵𝙵𝙾𝚁𝙳𝙰𝙱𝙻𝙴 & 𝙰𝙲𝙲𝙴𝚂𝚂𝙸𝙱𝙻𝙴

CONTRACTMODEL ANSWER

MISTAKE

“Ignorantia Facti Excusat but Ignorantia juris non Excusat”. Explain the statement in light of the provisions of the Indian Contract Act 1872.

As per Section 13 of the Indian Contract Act, Consent means when two or more persons agree upon the same thing in the same sense.
It is based on the Latin maxim “Consensus Ad Idem” which means Meeting of minds.
For example:- ‘A’ agrees to sell his house to ‘B’. ‘A’ owns three houses and wants to sell his house in Mumbai. ‘B’ thinks he is buying his Delhi house. Here ‘A’ and ‘B’ have not agreed upon the same thing in the same sense. Therefore, there is no consent and no contract afterwards.

The term “Free Consent” is defined under Section 14 of the Act which states that the consent is said to be free when it is not caused by

  1. Coercion under Section 15
  2. Undue Influence under Section 16
  3. Fraud under Section 17
  4. Misrepresentation under Section 18
  5. Mistake under Section 20,21,22

“Mistake” is not defined in the Indian Contract Act. Sections 20, 21 and 22 deal with the concept related to mistake.
A mistake is an erroneous belief that is innocent in nature. It leads to a misunderstanding between the two parties.
Mistake is of two types-

  1. Mistake as to the fact
  2. Mistake as to the law.

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 i.e., a bilateral mistake.
Mistake as to the fact is based on the Latin maxim Ignorantia Facti Excusat which means Ignorance of fact is an excuse.

For example- A agrees to buy from B a certain horse. It turns out that the horse was dead at the time of the bargain, though neither party was aware of the fact. The agreement is void.

Bilateral mistakes can be a-

  1. Mistake as to the existence of subject matter.
  2. Mistake as to the identity of the subject matter.
  3. Mistake as to the quantity of subject matter.
  4. Mistake as to the quality of subject matter.
  5. Mistake as to the price of subject matter.
  6. Mistake as to the performance of subject matter.
  7. Mistake as to the title of subject matter

In the case of Gallaway vs. Gallaway, both the parties were under the mistake that they were married. The two of them agreed to separate and thus made an agreement. Then it was found out that the man’s first wife was still alive which was actually unknown to both of them. The court held that the separation deed was void. It was on the grounds that the agreement had been done on the belief that they were married to each other, but turned out otherwise with the first wife being alive.’

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 a matter of fact i.e., a unilateral mistake.
Provided when the mistake is affected by fraud or misrepresentation it will make contact voidable and if the mistake is regarding the nature of the contract or regarding the identity of the parties then it will render the contract void.

In the case of Tapeline Vs. Jainee, The buyer wanted to buy land and was well versed with its measurement, he was also provided with the plan to study it further, but he declined and when he purchased the land he saw that garden area which he thought to be included in the plan was not there.

The court held that the contract can’t be revoked as it was clearly mentioned in the plan provided. And it was a mere mistake of one party. Hence the contract is valid.
Section 21 of the Indian Contract Act provides for the effect of mistake as to the law- A contract is not voidable because it was caused by a mistake as to any law in force in India; but a mistake as to a law not in force in India has the same effect as a mistake of fact.

Mistake as to the law is based on the Latin maxim Ignorantia juris non Excusat which means Ignorance of law excuses no one.
Example- 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.

Provided in some cases ignorance of law is excusable-

  1. Mistake as to the foreign law.
  2. Mistake regarding the private right.

In the case of Grant v. Borg, The accused was charged under the Immigration Act 1971, for staying beyond the time limit given by his leave. He asserted that he made requests to extend his stay but the same was rejected and he was not aware of the immigration law.
He was held liable as it was a mistake of law and he cannot apply for defence under the mistake of law.

Thus the general rule is mistake as to the fact is excusable but mistake as to the law is not excusable.

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