Assignment 1


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Assignment 1

  1. 1. Statement: Free consent is not present when there is a bilateral mistake a fact at thetime of execution of contract. CommentINTRODUCTION 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 arediscussed clearly in contract law and the execution of the consequences is clearlystated. The statement under the law is discussed below:FREE CONSENTAccording to section (14) of the contract act 1872Consent 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 freeas voidable. Such type of contracts may be challenges in courtBILATERAL MISTAKEBilateral mistake is one in which both the contracting parties are at mistake about thesame material thing/fact within the contract. It is obvious that when both the partiescommit any mistake the consent of either party will not be free because the subjectmatter or the fact to the contract is not acceptable to any of the party. The contract actregards any such type of contract as void Page 1
  2. 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 thiswhich 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.COMMENTIn the light of above mentioned laws of contract act and the consumer act a contractbecomes voidable when there is the element of absence of free consent and theaggrieved party may challenge such contract in the court. But in the statement we maysee that there is the element of bilateral mistake. In such a case where there is amistake the contract becomes void. And when we talk about bilateral mistake it istreated under sec 20 which says it as a void contract. Mistake at the time of execution ofcontract does not take any party as liable to that nor enforceable. No one is held liablefor that mistake and the contract may not be challenged in the court. Page 2
  3. 3. Free consent is required to make a contract enforceable, now if the consent will not befree the contracting parties will face some problems. Consensus ad idem (completemeeting of minds) is very essential part of any contract, when both parties are notgetting on any same point then the contract is void but it also depends upon the natureof 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 exploitedand the vilification may be settled easily but in the case where the mistake is of primarynature, the mistake that changes the soul of contract and that is material to the contractthen the contract becomes void. So in such case of the bilateral mistake the nature ofthe mistake matters a lot.In the case of a void contract the consent of parties may not be free and the contractlaw does not regard and such law enforceable that does not contain free consent. Insuch case both the contracting parties must make new contract and must clarify eachand every clause because when a mistake is made by both the contracting parties atthe time of the execution of the contract it is not the fault of either of the parties so noone could be held liable for that.CONCLUSIONWhen there is a bilateral mistake at the time of execution of contract between thecontracting parties the consent of the parties may not be free there for the contractcould not be enforced. The court does not regard any law enforceable if the consent isnot free or if there is any mistake in the contract.The problem arises when one of the contracting parties tries to take the unfairadvantage of the mistake. In such a case the aggrieved party may go to court and seekremedy. If the nature of the mistake does not go to the heart of the contract the contractis enforceable but if the mistake that is made by both parties is material to the contractthen court declares such contract as void and such contract may not then be challengedin the court. In such condition both the parties need to sign a fresh contract withconsensus ad idem. Court see the nature of mistake and the interest of parties. So on Page 3
  4. 4. the basis of nature of mistake and the consent of parties the decision is taken. Thenature of mistake plays vital role in this regard. It is the nature of mistake that maydeclare the contract as void or the voidable. No matter what type of problem occur lawis wide enough to cover it. Page 4