A bilateral mistake of facts may be of two kinds
Types of Bilateral Mistakes
- Mistake as to subject matter, or
- Mistake as to the possibility of performance
Bilateral Mistake of facts as to subject Matter
In such mistakes, both the parties to an agreement are mistaken about the subject matter of the contract and the agreement is void. A mistake as to the subject matter may take various forms. This may relate to existence, identity, title, quantity, quality or price of the subject matter.
A brief account of all these is given below.
1. Mistake as to existence of subject matter Where both the parties at the time of making the contract believe that subject matter of the contract existences, but in reality it does not, there is a mistake and the agreement is void. For example, X agrees to sell to Y a specific cargo of goods which is on its way from abroad. But unfortunately the ship carrying the cargo cast away before the date or bargain. Neither X or Y were aware of this. Under such circumstance agreement is void.
2. Mistake as to identity Where the parties to a contract have different subject matter in their minds, i.e., one party intends to deal with one thing and the other with another contract is void there being lack of consensus ad-idem.
3. Mistake as to quantity Where both the seller and the buyer have a misunderstanding about the quantity or extent of the subject matter, this will render the contract void. For example, P inquired about the price of rifles from H suggesting that he might buy as many as fifty. On receipt of the quotation he wired, ‘Send three rifles‘. But due to the mistake of the telegraph clerk, the message transmitted to H was ‘send the rifles‘. H dispatched fifty rifles. P accepted three rifles and returned the remaining forty seven. It was held that there was no contract between the parties. However, P was liable to pay for the three rifles, there being an implied contract entered into.
4. Mistake as to quality If there is a mistake as to quality of subject matter on the part of both the parties, the contract is void. For example, A offers to buy a race horse from 8, a horse dealer. 8 accepts the offer believing it to be for a cart horse. The agreement is void.
5. Mistake as to title Sometimes, the buyer already owns the property, which a person wants to sell to’ him. But the concerned parties are not aware of the fact. In such cases the agreement is void. For example, A agreed to take a lease of a fishery from B. A was already entitled to the fishery. But neither party at the time of the transaction was aware of the true state of the title. The agreement was held to be void.
6. Mistake as to price The agreement is also void where both the parties are mistaken about the price of the subject matter. For example, A agreed to lease out his quarry to B at the rate of Re.1 per cubic feet of stone extracted, subject to a minimum rent of Rs 5,000 per month. But in agreement, the figure of rent was written as Rs 50,000 by mistake. The agreement is void ab initio.
Bilateral mistake as to the possibility of performance
When parties to a contract enter into it believing that it is capable of performance, while in fact it is not so, there is a mistake of facts as to the possibility of performance. And the contract is void on this ground, i.e., impossibility. The impossibility to perform may arise due to physical reasons or legal reasons.
For example, D entered into a contract with R to play in a concert, on a particular day, to be organized by the latter. But D could not participate in the programme due to illness on that day. The court of law held that the contract became void on account of impossibility to perform.