Is Contract Formation Possible in Case of Unilateral Mistake of Fact?

Question: A, a car owner, agreed to sell his car to B for ₹50,000 with the mistaken belief that he owed ₹50,000 as tax to the government. Actually, he didn't. B was unaware of this mistake. Can A be held liable for specific performance of the contract? Explain.

Yaar, I was stuck on this one for days. The correct approach is to understand that the formation of a contract requires an offer and acceptance between parties with a common understanding of the terms. In this case, A's unilateral mistake of fact creates a misunderstanding. Since A's mistake is one of fact, not law, it's not necessarily an invalidating factor. But, the key point to note is that B knew nothing about A's mistake and had no way of knowing he was mistaken. This is a case of unilateral mistake where one party is aware, the other isn't.