Assignment 1
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Free consent is not present when there is a bilateral mistake of fact at the time a contract is executed. The Contract Act of 1872 considers bilateral mistakes and lack of free consent under different clauses. If there is a bilateral mistake about an essential matter of fact, section 20 states the contract is void. However, if the mistake is minor and does not affect the essence of the contract, it may be voidable. For a contract to be enforceable, free consent is required, and if consent is not free due to a bilateral mistake, the nature of the mistake determines whether the contract is void or voidable.
Assignment 1
- 1. Statement: Free consent is not present when there is a bilateral mistake a fact at the time of execution of contract. Comment INTRODUCTION Free consent and the bilateral mistake both have different treatments in the law. Contract act 1872 treats both things under different clauses. Both the things are discussed clearly in contract law and the execution of the consequences is clearly stated. The statement under the law is discussed below: FREE CONSENT According to section (14) of the contract act 1872 Consent is said to be free when it is not caused by- (1) Coercion, as defined in section 15, or (2) Undue influence, as defined in section 16,or (3) Fraud, as defined in section 17, or (4) Misrepresentation, as defined in section 18, or (5) Mistake, subject to the provisions of sections 20, 21 and 22. Sec 19 0f the contract act 1872 regards any act in which consent of any party is not free as voidable. Such type of contracts may be challenges in court BILATERAL MISTAKE Bilateral mistake is one in which both the contracting parties are at mistake about the same material thing/fact within the contract. It is obvious that when both the parties commit any mistake the consent of either party will not be free because the subject matter or the fact to the contract is not acceptable to any of the party. The contract act regards any such type of contract as void Page 1
- 2. According to section (20) 0f the contract act (1872) Agreement void where both parties are under mistake as to matter of fact Where both the parties to an agreement are under a mistake as to a matter of fact essential to the agreement, the agreement is void. Section 21 and section 22 of consumer laws and contract act are also related to this which are as under Section 21: A contract is not voidable because it was caused by a mistake as to any law in force in Pakistan; but a mistake as to a law not in force in Pakistan has the same effect as a mistake of fact. Section 22: A contract is not voidable merely because it was caused by one of the parties to it being under a mistake as a matter of fact. COMMENT In the light of above mentioned laws of contract act and the consumer act a contract becomes voidable when there is the element of absence of free consent and the aggrieved party may challenge such contract in the court. But in the statement we may see that there is the element of bilateral mistake. In such a case where there is a mistake the contract becomes void. And when we talk about bilateral mistake it is treated under sec 20 which says it as a void contract. Mistake at the time of execution of contract does not take any party as liable to that nor enforceable. No one is held liable for that mistake and the contract may not be challenged in the court. Page 2
- 3. Free consent is required to make a contract enforceable, now if the consent will not be free the contracting parties will face some problems. Consensus ad idem (complete meeting of minds) is very essential part of any contract, when both parties are not getting on any same point then the contract is void but it also depends upon the nature of mistake. If the mistake is of minor nature that does not go to the heart of the contract, then the contract becomes voidable because the interest of either party is not exploited and the vilification may be settled easily but in the case where the mistake is of primary nature, the mistake that changes the soul of contract and that is material to the contract then the contract becomes void. So in such case of the bilateral mistake the nature of the mistake matters a lot. In the case of a void contract the consent of parties may not be free and the contract law does not regard and such law enforceable that does not contain free consent. In such case both the contracting parties must make new contract and must clarify each and every clause because when a mistake is made by both the contracting parties at the time of the execution of the contract it is not the fault of either of the parties so no one could be held liable for that. CONCLUSION When there is a bilateral mistake at the time of execution of contract between the contracting parties the consent of the parties may not be free there for the contract could not be enforced. The court does not regard any law enforceable if the consent is not free or if there is any mistake in the contract. The problem arises when one of the contracting parties tries to take the unfair advantage of the mistake. In such a case the aggrieved party may go to court and seek remedy. If the nature of the mistake does not go to the heart of the contract the contract is enforceable but if the mistake that is made by both parties is material to the contract then court declares such contract as void and such contract may not then be challenged in the court. In such condition both the parties need to sign a fresh contract with consensus ad idem. Court see the nature of mistake and the interest of parties. So on Page 3
- 4. the basis of nature of mistake and the consent of parties the decision is taken. The nature of mistake plays vital role in this regard. It is the nature of mistake that may declare the contract as void or the voidable. No matter what type of problem occur law is wide enough to cover it. Page 4