Mistake under Indian Contract Act, 1872

I. Mistake of Law

In the framework of contracts, the word ‘Mistake’ refers to an inaccuracy or misunderstanding that has an impact on the conditions of an agreement. It is possible for errors to occur unintentionally and may be caused by a variety of circumstances, including misunderstandings of information, oversights, etc. Mistakes are recognized as a legitimate reason for disputing the validity of a contract under the Indian Contract Act, provided that certain requirements are satisfied. A Mistake is said to have occurred where the parties intending to do one thing by error do something else.

In the case of Phillips v. Brooks Ltd, it was held that a person is deemed to contract with a person in front of him, unless he can substantially prove that he, instead of the other person, intended to deal with another person.

A mistake can be defined as an erroneous belief concerning something. It may be of two kinds; Mistake of Law and Mistake of Fact.

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.

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