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If both the parties are under a mistake as to matter of fact essential to a contract, then contract is________:
- a)Void-ab-initio
- b)Voidable
- c)Void
- d)None of the above
Correct answer is option 'A'. Can you explain this answer?
Most Upvoted Answer
If both the parties are under a mistake as to matter of fact essential...
Void-ab-initio
When both parties to a contract are under a mistake as to a matter of fact essential to the contract, the contract is considered void-ab-initio. This means that the contract is treated as if it never existed in the first place and is completely unenforceable.
Essential Fact
An essential fact is a fact that is so fundamental to the contract that if it were not true, the parties would not have entered into the contract at all. In other words, the fact is crucial to the agreement between the parties.
Mistake of Fact
A mistake of fact occurs when one or both parties to a contract have a belief about a certain fact that is not in line with the actual truth. This mistake must be mutual, meaning that both parties must be mistaken about the same fact.
Example
Let's consider an example to better understand this concept. Suppose that Party A agrees to sell a painting to Party B, believing that the painting is an original work by a famous artist. However, it is later discovered that the painting is actually a forgery.
In this case, both parties were under a mistake as to the fact that the painting was an original work. This fact is essential to the contract because Party B would not have agreed to purchase the painting if they knew it was a forgery. Therefore, the contract is considered void-ab-initio.
Consequences
When a contract is void-ab-initio, it means that the parties are not bound by the terms of the contract and have no legal obligations towards each other. Any rights or obligations arising from the contract are extinguished.
In the example above, Party B would not be obligated to pay for the painting, and Party A would not be obligated to deliver it. Both parties are essentially restored to their original positions prior to entering into the contract.
Conclusion
When both parties are under a mistake as to a matter of fact essential to a contract, the contract is considered void-ab-initio. This means that the contract is treated as if it never existed, and the parties have no legal obligations towards each other.
When both parties to a contract are under a mistake as to a matter of fact essential to the contract, the contract is considered void-ab-initio. This means that the contract is treated as if it never existed in the first place and is completely unenforceable.
Essential Fact
An essential fact is a fact that is so fundamental to the contract that if it were not true, the parties would not have entered into the contract at all. In other words, the fact is crucial to the agreement between the parties.
Mistake of Fact
A mistake of fact occurs when one or both parties to a contract have a belief about a certain fact that is not in line with the actual truth. This mistake must be mutual, meaning that both parties must be mistaken about the same fact.
Example
Let's consider an example to better understand this concept. Suppose that Party A agrees to sell a painting to Party B, believing that the painting is an original work by a famous artist. However, it is later discovered that the painting is actually a forgery.
In this case, both parties were under a mistake as to the fact that the painting was an original work. This fact is essential to the contract because Party B would not have agreed to purchase the painting if they knew it was a forgery. Therefore, the contract is considered void-ab-initio.
Consequences
When a contract is void-ab-initio, it means that the parties are not bound by the terms of the contract and have no legal obligations towards each other. Any rights or obligations arising from the contract are extinguished.
In the example above, Party B would not be obligated to pay for the painting, and Party A would not be obligated to deliver it. Both parties are essentially restored to their original positions prior to entering into the contract.
Conclusion
When both parties are under a mistake as to a matter of fact essential to a contract, the contract is considered void-ab-initio. This means that the contract is treated as if it never existed, and the parties have no legal obligations towards each other.
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If both the parties are under a mistake as to matter of fact essential...
In bi lateral mistake it is void ab initio
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If both the parties are under a mistake as to matter of fact essential to a contract, then contract is________:a)Void-ab-initiob)Voidablec)Voidd)None of the aboveCorrect answer is option 'A'. Can you explain this answer?
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