Effect of mistake on validity of a contract:
Mistake is some unintentional act, omission or error, arising from unconsciousness, ignoranc or forgetfulness, imposition or misplaced confidence. It may be of two kinds-
(i) Mistake of Law: A mistake of law does not render a contract void as one cannot take excuse of ignorance of the law of his own country. But if the mistake of law is caused through the inducement of another, the contract may be avoided. Mistake of foreign law is excusable and is treated like a mistake of fact. Contract may be avoided on such mistake.
(ii) Mistake of fact: Where the contracting parties misunderstood each other and are at cross purposes, there is a bilateral or mutual mistake. 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.
Example: A ouers to sell his Ambassador Car to B, who believes that A has only Fiat Car, agrees to buy the car. Here, the two parties are thinking about diuerent subject matter so that there is no real consent and the agreement is void.
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