Question

Choose the correct answers from the following alternatives given
Which of the following agreements are void?
1. Agreement made under the unilateral mistake of fact
2. Agreement made under the bilateral mistake of fact
3. Agreement the consideration of which is unlawful
4. Contingent agreement

• A. 1 & 2
• B. 2 & 3
• C. 3 & 4
• D. 1 & 4

Answer 1

The correct option is B 2 & 3

Bilateral Mistake

When both parties of a contract are under a mistake of fact essential to the agreement, such a mistake is what we call a bilateral mistake. Here both the parties have not consented to the same thing in the same sense, which is the definition of consent. Since there is an absence of consent altogether the agreement is void.

However, to render an agreement void the mistake of fact should be about some essential fact that is of importance in a contract. So if the mistake is about the existence of the subject matter or its title, quality, quantity price etc then it would be a void contract. But if the mistake is of something inconsequential, then the agreement is not void and the contract will remain in place.

For example, A agrees to sell to B his buffalo. But at the time of the agreement, the buffalo had already died. Neither A nor B was aware of this. And so there is no contract at all, i.e. the contract is void due to a mistake of fact.