Types of Bilateral Mistakes

A bilateral mistake of facts may be of two kinds

Types of Bilateral Mistakes

  1. Mistake as to subject matter, or
  2. 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.

Leave a Reply

Recent Posts




Recent Comments


Related pages


name of indian stock exchangesales promotional strategies1us indian rupeesobservational market researchcash budgetsuncertain meaning in teluguexchange rate forecastingdifference between hire purchase and leasing ppthow to start a chit fund companyessay on black marketingwhat is meant by labour turnovermethods of venture financingmarginal absorption costingdisadvantages of marketing strategymixed economies definitionactivity based costing characteristicssms singlepointexplain caveat emptorliquid asset formulacontrolled observation advantages and disadvantagesdifference between agent and trusteeadvantages mixed economyfeatures of a perfectly competitive marketactivity based costing advantages and disadvantages exampleswhat is the meaning of perilsdays sales outstanding dsoinvestment holding definitiondifference between forwards and futuresultra vires actsrole of an underwriteradvantages of an autocratic leadership styleflexed budget formulaloan from cooperative banksmanagement diseconomiesoperating cycle accountingimpossibility of performance of contractdecentralized filing systemdifference between warranty and condition in contract lawlimitation of economic order quantitywhat is cluster sampling examplesmechanizingformula for direct materials usedtypes of partnership firmwhat are the advantages of capitalismduties of purchase officerrbi functions and workingadvantages of financial intermediariesactivity based responsibility accountingfinancial ratio analysis interpretationconglomerate merger meaningactivity based costing management accountingcash budget accountingshares and debentures meaningprocedure of winding up of a companyretail method of estimating inventorywhats a good quick ratiowto wikipediaeffects of caste system in indiaderivatives market in indialimitations of financial ratiodisadvantages of perpetual inventory systemwhat is the meaning of perilsexplain sales forecastingrights and duties of bailor and baileeturnaround ratiodefinition mergers and acquisitionsbretton woodprecis writing examplesfranchise disadvantages and advantagesfutures contract vs forward contractmeaning of requisitespetty cash accounting procedures