1.
Introduction
It
is not only fraud, misrepresentation, coercion and under influence, which make
a contract void or voidable, but validity of a contract can be affected when
mistake is committed during making of the contract. The reality is that valid
contract should be free from any kind of mistake on behalf of parties to the
contract.
2.
Meaning of Mistake
Mistake
means an error is comprehending facts, meaning of words or law, which cause one
party or both parties to enter into a contract without understanding the
obligations or results.
3. Kinds of Mistake and Effect of Mistake
Mistake
can be classified into following two major kinds
i. Mistake of Fact
It
is settled principle that if a mistake is about such matter of fact, which is
essential to an agreement, such mistake of fact can affect the agreement.
Mistake of fact can be further classified into following types.
a.
Unilateral Mistake
A
unilateral mistake happens where only one party to a contract is under mistake.
This kind of mistake is the most common one. Such kind of mistake can affect a
contract in the following two cases:
a-i.
A party’s own mistake
When
a party makes a contract with another party and does a mistakes during making
of the contract, such party cannot avoid the contract.
a-ii.
Mistake caused by Fraud etc
When
a party makes a contract with another party and unilateral mistake is committed
by this another party upon the party through fraud etc, such contract is
voidable and affected party can avoid such contract.
b.
Bilateral Mistake
A
bilateral mistake happens where both the parties to an agreement are under a
mistake about a matter of fact, which is essential to the agreement. Following
points further explain bilateral mistake.
b-i.
Essentials of Bilateral Mistake
Following
are the main essential to explain it.
x.
Mistake of both the parties
For
happening of bilateral mistake, it is essential that both the parties to a
contract should be under mistake.
y.
Relation between Mistake and Fact
For
happening of bilateral mistake, it is essential that mistake must relate to
some fact.
z.
Relation between Fact and Agreement
For
happening of bilateral mistake, it is essential that fact must be essential to
an agreement.
b-ii.
Types of Bilateral Mistake
a.
Mistake about subject matter
b.
Mistake about price of subject matter
c.
Mistake about quality of subject matter
d.
Mistake about identity of subject matter
e.
Mistake about ownership of subject matter.
b-iii.
Affect of Bilateral Mistake
When
both the parties to an agreement are under a mistake about a matter of fact,
which is essential to the agreement, the agreement is void. It is case of mutual
or common mistake. In such situation, contract does not remain binding upon
both the parties and, therefore, cannot be performed.
ii. Mistake of Law
Contrary
to mistake of fact, if a mistake is done about any law, which in force in
Pakistan, a contract is not voidable. It means that mistake of law does not
affect validity of a contract as far as Pakistani law is concerned. However, if
a mistake is done about a law, which is not in force in Pakistan, such mistake
has the same effect as that of mistake of fact. It means that contract can
become void if both the parties are under mistake about foreign law.
Final
Analysis
To
conclude, it can be stated that role of mistake is of great importance; it can
affect validity of a contract. It can make a contract either void or not
voidable. The reality is that mistake not only affect validity of a contract,
but also affects performance of a contract.
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