Question

Given below is a statement of legal principle followed by factual situation. Apply the principle to the facts and select the most appropriate answer.
Principle: Where both parties to an agreement are under a mistake as to matter of fact essential to the agreement, the agreement is void.
A had a piece of land. He believed that the value of the land was $Rs.1,000$ per square foot. B knew that the value of the land was infact $Rs.1,500$ per square foot. However, he did not inform A and purchased the land at $Rs.1,000$.

• A. The contract is valid since A should have been more careful
• B. The contract is valid since B paid for the land
• C. The contract is void since A was mistaken about the cost of the land
• D. The contract is valid since the land has already been purchased

Answer 1

The correct option is C The contract is void since A was mistaken about the cost of the land

As per the principle, in this case both the parties were mistaken of the actual price of the property and therefore the agreement was never complete and it was a void agreement. Therefore option (c) is the correct answer.