In one line
A shared mistake about an essential existing fact can make an agreement void, but a one-sided mistake ordinarily does not.
After this note, you should be able to
- Apply the four requirements of Section 20.
- Distinguish mistake of Indian law from mistake of foreign law.
- Handle unilateral mistake without overstating its effect.
Bilateral mistake under Section 20
The agreement is void only when both parties share a qualifying mistake.
- Both parties
- The mistake must be mutual, not confined to one side.
- Existing fact
- It must concern a fact existing when the agreement was made, not merely a disappointed future expectation.
- Essential to agreement
- The mistaken fact must go to identity, existence, title, quantity, quality or another foundation of the bargain.
- Value alone
- An erroneous opinion about value is not by itself a mistake of essential fact.
Mistake of law and unilateral mistake
Sections 21 and 22 prevent ordinary one-sided error from becoming an easy escape route.
- Indian law
- A mistake about Indian law does not make the contract voidable.
- Foreign law
- Mistake about foreign law is treated like a mistake of fact.
- One party
- A contract is not voidable merely because one party was mistaken, subject to narrow situations where real consent is absent, such as certain identity or document cases.
Work through the facts
Illustration
Facts
A agrees to sell B a cargo believed by both to be in transit. Unknown to both, the cargo had already been destroyed before the agreement.
Likely result
The existence of the cargo is an essential fact shared by both parties. The agreement is void under Section 20.
What to learn
Prove that the mistake was shared, existing and fundamental to the bargain.
Cases with a purpose
Landmark judgments
Learn the rule and where to use it. A case name without its legal function adds very little to an answer.
Raffles v. Wichelhaus
Further reading(1864) 2 H&C 906
Principle: A latent ambiguity about the subject of the bargain can prevent consensus where each party reasonably means a different thing.
Use in an answer: Use it for mistake or ambiguity concerning identity of the subject matter.
Tarsem Singh v. Sukhminder Singh
Further reading(1998) 3 SCC 471
Principle: A material shared mistake about the basis on which land and price were calculated made the agreement void under Section 20.
Use in an answer: Use it for bilateral mistake about an essential quantity or basis of a property transaction.
For a 10-mark answer
Answer structure
- Classify the mistake as fact or law, bilateral or unilateral.
- For Section 20, prove both parties, existing fact and essentiality.
- Exclude a mere error of value or future expectation.
- Apply Sections 21 or 22 where relevant and conclude.
Common mistakes
- Treating every bad bargain as mistake.
- Forgetting that Section 20 requires both parties to be mistaken.
- Calling a mistaken prediction an existing fact.
Before you close the tab
Quick revision
- Bilateral essential mistake of fact makes the agreement void.
- Mistake of Indian law gives no ordinary relief.
- Foreign law is treated as fact.
- Unilateral mistake ordinarily does not invalidate the contract.
Test yourself
- What four points must be shown under Section 20?
- How is foreign law treated?
- Does a mistaken opinion about value make an agreement void?
Short answers
Frequently asked questions
Does every factual mistake make an agreement void?
No. Under Section 20, both parties must be mistaken about a fact essential to the agreement.
What happens if only one party is mistaken?
Section 22 says the contract is not voidable merely for unilateral mistake, though narrow cases involving absence of real consent may require separate analysis.
Primary sources
This is an educational study note. Always read the bare provision and the full judgment before relying on a proposition in research or practice.