Question

Given below is a statement of legal principle followed by a factual situation. Apply the principle to the facts and select the most appropriate answer.  

Principle: Where both parties to an agreement are under a mistake as to the matter of fact essential to the agreement, the agreement is void.

Factual Situation: A had a piece of land. He believed that the value of the land was ₹1,000 per square foot. B knew that the value of the land was infact ₹1,500 per square foot. However, he did not inform A and purchased the land at ₹1,000.

Options

• The contract is valid since A should have been more careful 

• The contract is valid since B paid for the land

• The contract is void since A was mistaken about the cost of the land

• he contract is valid since the land has already been purchased.

Answer 1

The contract is void since A was mistaken about the cost of the land

Explanation:

As per the principle, in this case, both the parties were mistaken for the actual price of the property and therefore the agreement was never complete and it was a void agreement. Therefore option The contract is void since A was mistaken about the cost of the land is the correct answer.