Meaning and Definition of Mistake of Fact : There is well known maxim "lgnorontia facti excusat" It means 'Ignorance of fact excuses',  Where there is a mistake as to the fact material to the contract , it is called mistake of fact.

        According to Section 20 of the Indian Contract Act1872, 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.

Illustrations

(a) A agrees to sell to B a specific cargo of goods supposed to be on its way from England to Bombay. It turns out that, before the day of the bargain the ship conveying the cargo had been cast away and the goods lost. Neither party was aware of these facts. The agreement is void.

(b) A agrees to buy from B a certain horse. It turns out that the horse was dead at the time of the bargain, though neither party was aware of the fact. The agreement is void.

(c) A, being entitled to an estate for the life of B, agrees to sell it to C, B was dead at the time of agreement, but both parties were ignorant of the fact. The agreement is void.

Kinds of Mistake of Fact : 
 
 There are two kinds of mistake of fact are as follows 
   1) Unilateral Mistake  2) Bilateral Mistake


1) Unilateral Mistake  : 

 Mistake exists on either of the parties to the contract 


Illustration :  Sam agrees to Purchase a Mobile from Anna, thinking that it is a new one.In fact, it is not new. If Sam's erroneous belief that the Mobile is new, was not know to Anna, Sam cannot avoid the contract. If Sam's mistake was known to Anna , then Sam can avoid the contract.

2) Bilateral Mistake : 

        Bilateral mistake is in which mistake exists on the part of both the parties to the contract.

Illustrations  : 

      Sam agrees to buy an article from Anna. Both the parties (Anna and Sam)  are aware of the fact that the article is defective. It is bilateral Mistake. According to Section 20 of the Indian Contract Act 1872, "where both the parties to an agreement under a mistake as to a matter of fact essential to the agreement, the agreement is void." In this Illustration bilateral mistake committed and agreement is void . 

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