Premium Essay

Explain the Difference Mistakes and Misrepresentation Found in the Contract of Law.

In: Business and Management

Submitted By panashejose
Words 1400
Pages 6
Mistake
Mistake exists where parties to a contract think that they have agreed when in actual fact they have not. For a party to be able to set a contract aside on the basis of mistake he has to establish the following. The mistake should be one of fact not law, the mistake must concern a material fact and it must be a reasonable mistake. The types of mistakes in the contract of law include unilateral mistake, mutual mistake and common mistake.

Bilateral/common mistake
This exists where both parties are mistaken .They would be thinking that they have agreed when in actual fact there is a common mistake on either side, courts have usually allowed both parties to set such a contract aside. The academic argument which is well founded is that such a contract should be treated as void because one of the requirements that is (consensus ad idem) is missing. An error on the part of both parties of a transaction regarding the same matter, such as if two people sign a contract under a certain understanding, while the contract actually conveys a different meaning than they each may have expected. That a mistake of law does not invalidate a contract was held in Ncube V Ndlovu 1985 (2) RLR 281. The appellant seduced a major daughter of the respondent. The appellant then signed an agreement undertaking to pay the respondent damages for seduction. He wanted to avoid the contract on the basis that he was mistaken as to the law that is he did not know that a father has no right to sue for damages in respect of seduction damages of a major daughter. The appeal was dismissed because this was a mistake of law not a fact.
Mutual mistake
A mutual mistake is when both parties of a contract are mistaken as to the terms. Each believe they are contracting to something different. The court usually tries to uphold such a mistake if a reasonable interpretation of the terms can be found.…...

Similar Documents

Premium Essay

Law of Contract

...QUESTION 1 IF ONE OR BOTH PARTIES ENTER INTO A CONTRACT UNDER SOME MISUNDERSTANDING OR MISTAKEN ASSUMPTION, IN WHAT CIRCUMSTANCES WILL THE COURT INTERVENE TO HOLD THE CONTRACT VOID AND UNENFORCEABLE ON THE GROUNDS OF MISTAKE? In contract law, a mistake is an erroneous belief made by parties when contracting. Mistakes are not generally enforceable at the law court and are often treated as void or voidable. Mistakes are generally irrelevant, but exception to this places great emphasis on operative mistake which includes common mistake, mutual mistake and unilateral mistake. Mistakes or misunderstanding may render a contract void when the following are presents; * Mistake of the law; When a party enters into a contract, without the Knowledge of the law in the country, the contract is affected by a mistake making it unenforceable on the grounds of ignorance. Note also that the ignorance of the law is not an excuse. CASE Lydia a foreigner entered into contract with Amina in Ghana with the view that, Amina should supply heroine on a contract basis for a token of GHC 5,637,600 for every supply made. Unknowingly to Lydia that it is illegal to trade heroine in Ghana. Hence the contract is void and loses its enforceability at the law court. * Mistake of Fact; This happens where both parties enter into an agreement under a mistake as to a matter of fact essential to the agreement, the contract is declared void. For instance, ‘A’ agrees to buy a certain horse from ‘B’. It turns......

Words: 3695 - Pages: 15

Premium Essay

Consent in Contract Law

...CONSENT-COMPARISON BETWEEN ENGLISH AND INDIAN LAW 1|Page Table of Contends Introduction………………………………………………………4 Coercion…………………………………………………………..5 Undue Influence………………………………………………….9 Fraud……………………………………………………………..16 Misrepresentation……………………………………………….24 Mistake…………………………………………………………...31 Conclusion……………………………………………………….35 Bibliography……………………………………………………..36 2|Page Introduction Consent can defined as the meeting up of two minds. It well defined principle in common as well as in Indian Law. Section 13 of the Indian Contract Act, 1872 clearly defines consent which says that: Two or more persons are said to consent when they agree upon the same thing in the same sense. For example a customer buys a food processor because the retailer has claimed that the product was made in France but actually the product was made in Taiwan or an instance where a patient signed a contract to pay large sum of money to a doctor for immediate surgery which was actually unnecessary. In all the cases the offer was accepted leading to formation of an agreement and even there was a meeting of minds. However the consent of the person has been manipulated. If it were not the misrepresentation or undue influence the person should not have signed the agreement. It would be unjust if the contract was not set aside. S.10 of the Indian Contract Act says that: All agreements are contracts if they are made by the free consent of parties competent to contract, for a......

Words: 12813 - Pages: 52

Premium Essay

The Indian Contract Act, 1872

...INDIAN CONTRACT ACT, 1872 The law relating to contract is governed by the Indian Contract Act, 1872. The Act came into force on the first day of September, 1872. It extends to the whole of India except the State of Jammu and Kashmir. The Act is by no means exhaustive on the law of contract. It does not deal with all the branches of the law of contract. Thus, contracts relating to partnership, sale of goods, negotiable instruments, insurance etc. are dealt with by separate Acts. What is contract? The term contract has been defined by various authors in the following manner: “A contract is an agreement creating and defining obligations between the parties”. —Salmond “A contract is an agreement enforceable at law, made between two or more persons, by which rights are acquired by one or more to acts or forbearances on the part of the other or others”. —Anson “Every agreement and promise enforceable at law is a contract”. —Sir Fredrick Pollock The Indian Contract Act has defined contract in Section 2(h) as “an agreement enforceable by law”. These definitions indicate that a contract essentially consists of two distinct parts. First, there must be an agreement. Secondly, such an agreement must be enforceable by law. To be enforceable, an agreement must be coupled with an obligation. A contract therefore, is a combination of the two elements: (1) an agreement and (2) an obligation. Thus Contract = Agreement +enforcement at......

Words: 16603 - Pages: 67

Premium Essay

Indian Contract Act

...INDIAN CONTRACT ACT, 1872 The Law of Contract Constitutes the most important branch of mercantile or commercial law. It affects everybody, more so, trade, commerce anq industry. It may be said that the contract is the foundation of the civilized world. The law relating to contract is governed by the Indian Contract Act, 1872 (Act No. IX of 1872). The preamble to the Act says that it is an Act "to define and amend certain parts of the law relating to contract". It extends to the whole of India except the State of Jammu and Kashmir. The Act mostly deals with the general principles and rules governing contracts. The Act is divisible into two parts. The first part (Section 1-75) deals with the general principles of the law of contract, and therefore applies to all contracts irrespective of their nature. The second part (Sections 124-238) deals with certain special kinds of contracts, e.g., Indemnity and guarantee, bailment, pledge, and agency. The term contract has been defined by various authors In the following manner: "A contract is an agreement creating and defining obligations between the parties". -Salmond "A contract is an agreement enforceable at law, made between two or more persons, by which rights are acquired by one or more to acts or forbearances on the part of the other or others". -Anson "Every agreement and promise enforceable at law is a contract". -Sir Fredrick Pollock The Indian Contract Act has defined contract in......

Words: 27228 - Pages: 109

Premium Essay

Contract Law

...Contracts Agreements between two entities, creating an enforceable obligation to do, or to refrain from doing, a particular thing. Nature and Contractual Obligation The purpose of a contract is to establish the agreement that the parties have made and to fix their rights and duties in accordance with that agreement. The courts must enforce a valid contract as it is made, unless there are grounds that bar its enforcement. Statutes prescribe and restrict the terms of a contract where the general public is affected. The terms of an insurance contract that protect a common carrier are controlled by statute in order to safeguard the public by guaranteeing that there will be financial resources available in the event of an accident. The courts may not create a contract for the parties. When the parties have no express or implied agreement on the essential terms of a contract, there is no contract. Courts are only empowered to enforce contracts, not to write them, for the parties. A contract, in order to be enforceable, must be a valid. The function of the court is to enforce agreements only if they exist and not to create them through the imposition of such terms as the court considers reasonable. It is the policy of the law to encourage the formation of contracts between competent parties for lawful objectives. As a general rule, contracts by competent persons, equitably made, are valid and enforceable. Parties to a contract are bound by the terms to which they have agreed,......

Words: 12598 - Pages: 51

Premium Essay

Essay

...BUSINESS LAW BLO1105 2014 Prepared by Darren Parker BLO1105 – Business Law ------------------------------------------------- Business Law Students’ Manual ------------------------------------------------- 2014 Edition This Manual contains materials essential for all students undertaking Business Law, including: * ------------------------------------------------- Course Guide for Business Law; * ------------------------------------------------- Unit of Study Syllabus for Business Law: * ------------------------------------------------- Lecture Program for the Unit of Study; * ------------------------------------------------- Tutorial Programs and Questions; * ------------------------------------------------- Past Examination Papers; and * ------------------------------------------------- Other essential data regarding the Unit of Study. Manual and Tutorial Program compiled by Darren Parker (College of Law and Justice) VICTORIA LAW SCHOOL College of Law and Justice Unit Coordinator – Robert Alvarez Robert.Alvarez@vu.edu.au TABLE OF CONTENTS ------------------------------------------------- ITEM DESCRIPTION PAGE/S NUMBER 1. Table of Contents 2 2. Introduction 3 3. Assessment 4 4. Assignment instructions 4 -17 5. Assignment Topics for 2014 18-21 ......

Words: 25170 - Pages: 101

Premium Essay

Business Law

...Aspects of Contract and Negligence for Business | Introduction  The main purpose of the report is to recognize the aspects of Contract and Negligence for a Business. In these days, the business atmosphere is filled with agreements between industries and individuals. Whereas oral agreements may be used, maximum businesses use proper written contracts while engaging in actions. Written contracts deliver businesses and individuals with a lawful document affirming the prospects of both the parties and in what way negative situations might be resolved. Contracts are lawfully enforceable in court of regulation. Contracts often signify a instrument that companies practice to defense their capitals. Negligence has speedily developed to the basis of our system for reimbursing people for unintentional damage and grievances. It allows the benches toward compensations in tort in particular conditions where it is impossible to continue a contract. It has furthermore been used innovatively to compensate individuals for financial fatalities in business settings where no extra remedy was accessible. Executive summary The aim of this learning is to study the basic lawful values for which we can use in the applied aspects of business. Also from the case studies which is given is very helpful for practical day to day issues. This is focused on non-lower therefore we should give a clear picture of the concepts such as contracts, negligence torts, breach of condition etc. This is also...

Words: 4535 - Pages: 19

Premium Essay

Meaning, Characteristics and Types of a Company

...partnership business. The Multinational companies like Coca-Cola and, General Motors have their investors and customers spread throughout the world. The giant Indian Companies may include the names like Reliance, Talco Bajaj Auto, Infosys Technologies, Hindustan Lever Ltd., Ranbaxy Laboratories Ltd., and Larsen and Tubro etc. 1.2 MEANING OF COMPANY Section 3 (1) (i) of the Companies Act, 1956 defines a company as “a company formed and registered under this Act or an existing company”. Section 3(1) (ii) Of the act states that “an existing company means a company formed and registered under any of the previous companies laws”. This definition does not reveal the distinctive characteristics of a company . According to Chief Justice Marshall of USA, “A company is a person, artificial, invisible, intangible, and existing only in the contemplation of the law. Being a mere creature of law, it possesses only those properties which the character of its creation of its creation confers upon it either expressly or as incidental to its very existence”. Another comprehensive and clear definition of a company is given by Lord Justice Lindley, “A company is meant an association of many persons who contribute money or money’s worth to a common stock and employ it in some trade or business, and who share the profit and loss (as the case may be) arising there from. The common stock contributed is denoted in money and is the capital of the company. The persons who contribute it, or to whom it......

Words: 114216 - Pages: 457

Premium Essay

13 Chapter Contracts and Sales: Performance and Remedies

...13 CHAPTER CONTRACTS AND SALES: PERFORMANCE AND REMEDIES TRUE/FALSE 1. A contract with a minor is voidable at the minor's option. ANS: T NAT: AACSB: Analytic TOP: capacity 2. A contract with a party who has been declared incompetent is voidable. ANS: F NAT: AACSB: Analytic TOP: capacity 3. The contracts of a person who has been declared legally incompetent are void. ANS: T NAT: AACSB: Analytic TOP: capacity 4. Minors are liable for the reasonable value of necessaries. ANS: T NAT: AACSB: Analytic TOP: capacity 5. Material information is something that would affect the decision to buy or sell. ANS: T NAT: AACSB: Analytic TOP: misrepresentation 6. Misrepresentation must be fraudulent before rescission can be permitted. ANS: F NAT: AACSB: Analytic TOP: misrepresentation 7. Puffing is sufficient grounds for setting aside a contract on the basis of misrepresentation. ANS: F NAT: AACSB: Analytic TOP: misrepresentation 8. "This shirt is 100% cotton" is a statement that is puffing. ANS: F NAT: AACSB: Analytic TOP: puffing 9. Fraud is misrepresentation with intent to mislead or deceive. ANS: T NAT: AACSB: Analytic TOP: fraud 10. Duress requires proof of physical force. ANS: F NAT: AACSB: Analytic TOP: duress 11. Scienter is required for misrepresentation. ANS: F NAT: AACSB: Analytic TOP: misrepresentation 12. Undue influence requires proof of a confidential relationship. ANS: T NAT: AACSB: Analytic TOP: undue influence 13. Competency licensing statutes do not prevent enforcement of......

Words: 4949 - Pages: 20

Premium Essay

Company Law

...company and explain its features. Make a distribution between company and partnership firm. Explain the various types of companies. INTRODUCTION Industrial has revolution led to the emergence of large scale business organizations. These organization require big investments and the risk involved is very high. Limited resources and unlimited liability of partners are two important limitations of partnerships of partnerships in undertaking big business. Joint Stock Company form of business organization has become extremely popular as it provides a solution to (1) overcome the limitations of partnership business. The Multinational companies like Coca-Cola and, General Motors have their investors and customers spread throughout the world. The giant Indian Companies may include the names like Reliance, Talco Bajaj Auto, Infosys Technologies, Hindustan Lever Ltd., Ranbaxy Laboratories Ltd., and Larsen and Tubro etc. 1.2 MEANING OF COMPANY Section 3 (1) (i) of the Companies Act, 1956 defines a company as “a company formed and registered under this Act or an existing company”. Section 3(1) (ii) Of the act states that “an existing company means a company formed and registered under any of the previous companies laws”. This definition does not reveal the distinctive characteristics of a company . According to Chief Justice Marshall of USA, “A company is a person, artificial, invisible, intangible, and existing only in the contemplation of the law. Being a mere creature of law, it......

Words: 114302 - Pages: 458

Premium Essay

Short Note on Contact Law

... Q. What is a general offer? How is a contract created through general offer? Refer to leading cases. An offer may be made to the world at large. Such an offer is a general offer. However, a contract is not done with the whole world but only with the person who comes forward and accepts the offer. The acceptance might be express or implied. As per Anson, "An offer need not be made to an asertained person, but no contract can arise until it is accepted by an ascertained person". Case of Carllil vs Cabolic Smoke Ball Company. Creation of the contract - If the person performs the conditions of the offer. Thus, a person who finds a lost dog fulfills the condition of the prize money and thus a contract with the owner of the dog is created. General Offer of Continuing Nature - Some offers such as finding a lost object close when it is accepted by the first person. However, some offers, such as in the Carllil case, it can be accepted by any number of persons until the closing date of offer or until it is retracted. Q. Describe the law relating to communication of proposals, their acceptance and their revocation. Section 2(a) of Indian Contract Act 1972 says that when a person signifies his willingness to do or to abstain from doing something to another, with a view to obtaining the assent of that another, he is said to make a proposal.  Further, section 2(b) says that when the person to whom the proposal is made signifies his assent, the proposal is said to be accepted. The......

Words: 38063 - Pages: 153

Premium Essay

Midterm Week 4

...1. | Question : | Examine this situation: John: "I am thinking of selling my end tables from my living room." Mary: "If you were going to sell them, I would be interested in buying them." John: "Sold." | | | Student Answer: | | ( ) There is a contract and Mary is obligated to buy the tables. | | | | ( ) There is no contract because there was no agreed-upon price. | | | | (X) There is a contract and the UCC can provide a market price as the price for the contract. | | | | ( ) There is no contract because there is no offer or acceptance. | | | | ( ) none of the above. | | | | Points Received: | 0 of 5 | | Comments: | | | | 2. | Question : | Non-public figures need not prove the publication element in their suits for defamation. | | | Student Answer: | | ( ) True | | | | (X) False | | | | Points Received: | 5 of 5 | | Comments: | | | | 3. | Question : | The duty of a reasonable person does not extend beyond statutorily imposed duties. | | | Student Answer: | | ( ) True | | | | (X) False | | | | Points Received: | 5 of 5 | | Comments: | | | | 4. | Question : | Commercial speech has the same level of First Amendment protection as political and individual speech. | | | Student Answer: | | (X) True | | | | ( ) False | | | | Points Received: | 0 of 5 | | Comments: | | | | 5. | Question : | Stare decisis......

Words: 3764 - Pages: 16

Premium Essay

Module 1-5

...Describe the natural law and positivist law schools.  (100 word guideline). | Selected Answer: | Legal positivism and the natural law theory are rival views about what law is and its relation to justice and morality. Natural law is the set of truths of morality and justice and rejects ethical subjectivism and affirms ethical objectivism. Positive laws are commanded by political superiors. The consentrate of legal positivism is the "separation thesis" which can be defined as someone having the legal right to do something but not having the moral right to do it. They are general commands by people who themselves are not bound by them and who can also force obedience from everyone else.  | Correct Answer: | [None] | Response Feedback: | [None Given] | | * Question 2 10 out of 10 points | | | Identify and explain the various sources of American law.  (150 word guideline). | | | | | Selected Answer: | American law has a ranking system specifically associated with it. For Americans to know which body of law must prevail if there is a direct or even indirect conflict, this system is necessary. There are several primary sources of American law. The U.S. Constitution and decisions by the U.S. Supreme Court interpreting the U.S. Constitution, federal statues and treaties and as well as federal administrative law. The federal case law is to interpret anything outside of the U.S. Constitution. The federal law is also superior to all sources of state law. This......

Words: 8648 - Pages: 35

Premium Essay

Pieces26

...TRUCT ACADEMY SUCCESS IN BUSINESS LAW FOR C.I.S, Z.I.M CERT., ZAAT, IAC, I.C.M M. MAVHUNGA LLB (S) (UZ) 3RD EDITION 2000 1 ACKNOWLEDGEMENTS` I would like to thank the Director of Trust Academy, Mr Mataka, The Principal, Mr Sauti and the Registrar Mr Kucherera whom without their support this study pack would not have been a success. To them I say keep the god spirits for enhancing the college and making it a force top reckon with according to international standards. Would also like to thank the Trust Academy Secretaries and Typists of this book, particularly, SHELTER MAVHUNGA, MISI MAKUZWA, AMANDA MANDA and JESCA KAMUNGA for their commitment to duty. Again their handwork in the production of this copy is highly appreciated. Anyone who directly contributed to the success of this module I say, God bless you. However none of the above will be accountable for any errors of omission or commission which might appear in this study pack. M. MAVHUNGA 2 Dedication This study pack is dedicated to the targeted students who commit themselves to passing the interesting course of business law. Foreword Business Law is a very broad course and covers many aspects. It is a challenging course a proper approach is not advised to new students but an interesting and very simple course once one grasps the concepts. The objective of this module is to simplify Business Law to be understood by Ordinary Advanced Level students who may be taking any of the above courses. The field......

Words: 55636 - Pages: 223

Premium Essay

Business Law Notes

... • Literal Rule There are three (3) principles of law that can be applied to interpret the law, where the Literal rule can be applied and if absurdity exist either the Golden or the Mischief rule can be used. The Literal rule considers the law as what it says where the natural meaning of the words are used for interpretation; this can be depicted in the case Regina v Barrymore where the defendant was charged with the offence of wounding with the intent to murder, however the learned magistrate of St John’s Magistrate’s court committed the defendant to stand trial on a charge of wounding with intent to do grievous bodily harm. The court however had no power to commit the defendant for any offence other than the offence with which he had been charged. • Golden Rule The Golden rule is an extension of the literal rule, giving either narrow or wide meaning to the law; the Narrow meaning can be exemplified in the case of Marilyn Spenser v the Attorney General (AG), where the appellants, members of the Executive of the Committee of the Hallelujah Square Tabernacle church submitted to the Attorney General (AG) articles of incorporation of the church as a religious non- profit organization. However, the AG rejected the request stating that a nonprofit company must be a commercial enterprise which is to be carried out without financial gain to its members. Wide Meaning on the other hand is used to give law a wider meaning, such as in the case of William Chaitam and......

Words: 21185 - Pages: 85