Question

Principle: 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. 

Factual Situation: Roxanne supplies designer clothes to big showrooms and famous cloth houses. Max agrees to buy a certain consignment of only pink designer clothes for his shop due to the pink coloured theme of his famous shop. The issue cropped up when the exclusive pink coloured dresses were not delivered to Max's showroom, but to some other buyer, who had earlier contracted with Roxanne's store and all this was neither in the knowledge of Roxanne nor Max Decide whether the contract between Roxanne and Max is void?

Options

• Yes, because Roxanne and Max were under a mistake  as to matter of fact which is essential to the agreement  

• No, because Max's agreement was fresh, so it is legally binding  

• Yes, because an earlier commitment made by store  owner to some other buyer 'is far more relevant than  another commitment

• Roxanne and Max's contract is valid  

Answer 1

Roxanne and Max's contract is valid

Explanation:

Roxanne and Max's contract is valid is correct. An agreement will be binding on both parties and will remain so until any one of them violates the terms of the agreement. In the given case what happened between Roxanne and third party does affect the agreement between Roxanne and Max. Further, neither of them is planning to violate the terms of the agreement so the contract stands valid.

 

Yes, because an earlier commitment made by the store owner to some other buyer 'is far more relevant than another commitment is incorrect as the agreement between Roxanne and some earlier party holds no relevance whatsoever on the validity of an agreement between Roxanne and Max.

 

No, because Max's agreement was fresh, so it is legally binding is also incorrect as the validity of agreement does not depend upon its freshness or staleness.

 

Yes, because Roxanne and Max were under a mistake as to the matter of fact which is essential to the agreement are incorrect. As any commitment with any other party will not be a mistake as to the matter of fact essential to this agreement.