Voidability of Contract: Case of Unilateral Mistake
contract clat_pg beginner poll_styleYar, CLAT PG prep is getting intense and I'm stuck on a question. Consider this scenario - XYZ Inc issues a cheque to ABC Ltd for ₹50 lakhs, which gets bounced due to insufficient funds in XYZ's account. XYZ claims it was a unilateral mistake, and they forgot to update their account balance. Now, ABC Ltd wants to declare the contract void. Question is, can they do it? I've got two possible options:
1. No, ABC Ltd can't declare the contract void because XYZ Inc's unilateral mistake doesn't vitiate the consent of the parties. It's an honest error, and they're willing to perform. 2. Yes, ABC Ltd can declare the contract void since XYZ Inc's unilateral mistake affects the essential nature of the contract, i.e., the payment.
Which one is correct? Why? Help a bro out!
2 Comments
Unilateral mistake ke case mein, contract voidable hota hai jo unke khiloni ke sath juta hai. Lagbhag S 20(b) U/LA kaha jaata hai, jahan yeh kaha gaya hai ki yadi ek party ko lagta hai ki deal mein jo conditions hain unki jaankari nahi thi, toh us contract ko unke khiloni ke sath break kiya ja sakta hai.
I don't agree, yaar! Unilateral mistake shouldn't always void a contract. Consider a scenario where a buyer mistakenly thinks a car is in good condition. If the seller has acted reasonably, the contract shouldn't be voided just because of a buyer's oversight. This approach will encourage dishonesty and over-litigation. Instead, let's look at the principle of 'unfair prejudice' - the contract should be enforceable if the mistake hasn't caused significant harm to the buyer.