Page 59 - DCOM103_COMMERCIAL_LAW

Commercial Law

Notes Mistake as to the identity of the person contracted with. It is a fundamental rule of law that if
one of the parties represents himself to be some person other than he really is, there is a mistake
as to the identity of the person contracted with.
Mistake as to the nature of contract: if a person enters into a contract in the mistaken belief
that he is signing a documents of a differentclass and character altogether, there is a mistake as to
the nature of the contarct and the contract is viod.
Mistake of Law

It may be (i) mistake of law of the land, or (ii) mistake of foreign law. In the first case the rule is

“Ignorantia juris non-excusat”.
Meaning of “ignorantia juris non excusat”: It means ignorance of law is no excuse. A contract is
not voidable because it was caused by a mistake as to any law in force in India. Thus, where A
and B make a contract grounded on the erroneous belief, that a particular debt is barred by the
Limitation Act; the contract is not voidable. (s.21) Further, “A mistake as to a law not in India has
the same effect as a mistake of fact”.
Mistake of Foreign Law: The above maxim – “ignorance of law is no excuse” is inapplicable to
foreign law. The mistake of foreign law is to be treated as a mistake of fact.
Consequences of Mistake on Contracts: Mistake renders the contract void and as such in case of
a contract which is yet to be performed the party complaining the mistake may repudiate it, i.e.,
need not perform it. If the contract is executed the party who received any advantage must return
it or make compensation for it as soon as the contract is discovered to be void.

Task Peter, by way of misrepresentation, leads Deepak erroneously to believe that
100 quintals of indigo are made annually at Peter’s factory, Deepak examines the accounts
of the factory and finds that only 50 quintals of indigo have been made. Afterwards,

Deepak buys the factory. Deepak now wants to avoid the contract on the ground of
misrepresentation. Advise him giving reasons.

5.2 Differences between Coercion and Undue Infl uence

Coercion Undue Infl uence
Consent obtained by committing or threatening to Consent obtained from denomination of the will
commit an act forbidden by law. of the other
Physical character. It involves mostly use of physical Use of moral Force/Pressure to obtain consent .
or violent force
Directed against a person or his property Threat against person himself and not against
his property
No relationship need to exist b/w parties Some sort of relationship b/w the parties to
contract
May be committed outside India Should have been committed in India if it is to
be taken into notice of Indian Law

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