MISTAKE Animesh

SECTION 13: CONSENT

DEFINED
Two or more persons are said to consent when they agree upon the same thing in the
same sense. Both the parties should agree to the same thing in the same sense. This is
essential to the formation of the contract.
If there is no consensus ad idem or no meeting of minds then there will be no
agreement between the parties as the offer an acceptance do not coincide.
Example- A and B entered into a contract saying A would deliver a cargo of cotton to
B. The cargo of cotton was supposed to arrive from Bombay by a ship. Now, there
were two ships with same name sailing from Bombay. One in October and the other
one in December. B thought that the cargo would come by the ship sailing in October.
However, A thought of sending it through the ship which was sailing in December. A
dispatched the cotton in December but B refused it. In this case there was no meeting
of minds. The offer and acceptance did not coincide.
 AGREEMENT VOID WHERE BOTH
PARTIES ARE UNDER MISTAKE AS TO
MATTER OF FACT — (SECTION 20)
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.
Explanation.—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.
Example 1- A agrees to buy from B 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.
Example 2- A agrees to sell to B a specific cargo of goods supposed to be on its way from
England to Bombay. It turns out that, before the day of the bargain, the ship conveying the
cargo had been cast away and the goods lost. Neither party was aware of the facts. The
agreement is void.
SECTION 20 WILL APPLY:
When both the parties to an agreement are mistaken;
Their mistake is as to a matter of fact; and
The fact about which they are mistaken is essential to the agreement.
WHAT FACTS ARE ESSENTIAL?
Will Theory vs. Objectivity Of Contracts – an inherent trouble?
Those facts which are essential to the agreement
It would depend on the nature of the contract
It would vary from case to case.
Generally the identity of the parties, nature and content of the promise, subject-
matter of the contract are essential facts to the agreement.
So basically, if such misunderstanding had not been there, then the parties would not
have entered into the contract.
EFFECT OF MISTAKES AS TO
LAW SECTION 21
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.
Ignorance of law is not an excuse. You are supposed to know the law of your own
country.
Ignorantia juris non-excusat
Mistake regarding the foreign law has same effect as that of mistake of fact.
CONTRACT CAUSED BY
MISTAKE OF ONE PARTY AS
TO MATTER OF FACT SECTION
22

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.
TARSEM SINGH V.
SUKHMINDER SINGH, 1998 3
SCC 471
Facts
Tarsem Singh was the owner of certain land.
He entered into a contract with Sukhminder Singh to sell the land.
The seller intended to sell land in terms of ‘kanals’. However, the buyer intended to purchase the land in
terms of “bighas”.
Issue
Whether there was a mistake of fact?
Judgement
The was no meeting of minds in this case with respect to the unit of measuring land.
It was a mistake of fact essential to the agreement.
Thus void.
 EXAMPLES
1) A and B enter into an agreement where A would sell his house to B for Rs
50,00000. By mistake the document they executed for the agreement is a 10 years
lease, instead of full transfer of the ownership. Neither party was aware of it at the
time of signing the agreement.
2) A and B enter into a contract on the erroneous belief that the particular debt is
barred by the Indian Law of Limitation.
3) There was an auction for the sale of fishery rights. The plaintiff got the bid as he
made the highest bid of Rs 40,000. The fishery rights were auctioned for three years.
The rent was Rs 40,000 per year. The plaintiff was under a mistake thinking that the
rent for the fishery was 40,000 for three years and not per year.
 EXAMPLES
A agreed to buy a box of apples from B. and for that he took Rs 200. A found out
that his wife had disposed off the box of apples a day before as the apples were
already rotten.
A agreed to sell a chemical substance to B, who is a citizen of Indonesia. The
Indonesian law prohibits buying/selling/ export/import of that particular chemical
substance.
A agreed to sell oats to B and send him sample of the same. B refused to accept it on
the ground that they were old in quality.
WHAT
CONSTITUTES AN
ESSENTIAL FACT?
a. The identity of the parties
b. Identity and nature of the subject-matter of the
contract
c. Nature and content of the promise itself
1. Mistake as to identity 
Assumptions of False name
Mistake caused by takeover of business 
Where identity is especially important 
2. Mistake as to subject Matter
3. Different Subject matters in mind
4. Mistake as to substance of the subject matter
Where identity is very important –

Said vs. Butt –

The plaintiff wanted to go to a play’s first night. He had fallen out with the
management of the theatre, and knew that he would not get a ticket in his own name.
He got a friend to go to the theatre and buy a ticket for him without disclosing the
fact. When he turned up for the performance he was refused admission. He brought a
claim against Sir Alfred Butt the managing director of the theatre.
Held: His claim was dismissed. Said had not established that a contract existed
between himself and the company, and that he had consequently failed to prove that
Sir Alfred had caused any breach of the alleged contract in refusing Mr Said
admission to the theatre.
 MISTAKE AS TO SUBJECT
MATTER
Sheikh Bros Ltd v Ochsner
The parties had entered a contract which obliged the respondent to cut and manufacture
all sisal growing on 5000 acres of land in Kenya. The respondent was required to deliver
to the appellant 50 tons of sisal fibre for sale per month.
However, the respondent was unable to do so as the leaf potential of the sisal was
insufficient to produce so much monthly. The question before the court was whether the
mistake as to the possibility of performing the contract renders the contract void. The
court held that there was a mistake as to the matter of fact essential to the contract and
thus the contract was void.
 MISTAKE AS TO NATURE OF
PROMISE
Where contract fails to express parties’ intention
The defendants, Colin and Shields, were hide merchants that were based in London. The
complainant, Hartog, was a furrier from Belgium. The defendants entered into an oral agreement
with the complainant to sell him 30,000 Argentinian hare skins and this would be at a price of 10d
per skin. However, the defendant made a mistake on their written agreement that said they would
sell the complainant 30,000 hare skins at 10d per pound. This would mean that the price difference
was one third cheaper for the complainant than had previously been agreed. Hartog accepted this
offer, but the defendants refused to fulfil contract.
Documents mistakenly signed or Non Est factum
Foster v Mackinnon (1869) - The defendant, an elderly gentleman, signed a bill of exchange on
being told that it was a guarantee similar to one which he had previously signed. He had only been
shown the back of it. It was held that there should be a new trial.