When a person misunderstood or misinterprets the facts of something, he is at a mistake.
The mistake may be defined as when either one or both the parties to the contract give their consent, which is caused by misunderstanding, and if this fact is not presented they would not come into the contract; the contract is said to be caused by the mistake.
Section 14(5) of the Indian Contract Act, 1872 says that the consent is said to be free when it is not caused by mistake, subject to the provisions of Sections 20, 21 and 22.

Kinds of mistake:
The Indian Contract Act, 1872 describes two types of mistakes:
Mistake of fact
Mistake of law
Mistake of fact –
Mistake of fact can be divided into two parts:
Bilateral mistake of fact-
Section 20 of the Indian Contract Act, 1872 says that “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”, which means if both the parties of the agreement have misunderstood the facts than the agreement is said to be void. For this, we have a maxim ‘ignorantia facit excusat’ which means ignorance of the fact is an excuse. It is said bilateral because in this type of agreement both the parties of the agreement are at mistake.
In Couturier v. Hastie, both the parties of the agreement were unknown to the subject matter at the time of the agreement that the cargo is on sail and has been sold intermediately to the third party. Hence, the contract is void.

Unilateral mistake of facts-
However, Section 22 of this act says that “a contract is not voidable merely because it was caused by one of the parties to it being under a mistake as to a matter of fact”, which means if one party of the contract is at mistake than the contract is not voidable.
In Ayekpam Angahal Singh v. The Union of India, the petitioner was at the mistake that he had made a bid of Rs. 40,000 which is a rent of three years. But in actuality, this is the rent for one year. Since it is a unilateral mistake, it is not voidable. It is decided to be continued as a contract.

Mistake of law –
The maxim ‘ignorantia juris non excusat’, means that ignorance of the law is not an excuse. Therefore, Section 21 of the Indian Contract Act, 1872 defines, “a contract is not voidable because it was caused by a mistake as to any law in force in India; but a mistake as to a law not in force in India has the same effect as a mistake of fact”, means that the parties to the contract cannot claim any redress on the ground that they were unaware of the law that is in force in India.
In Grant v. Borg, it was held that the defendant was convicted of overstaying the time given by his leave to enter the UK. If information about the law is accessible, a defendant is deemed to know of it. Ignorance of a fact necessary to conviction may be a defense, but ignorance of the law was not.
In a contract mistake, can be either mistake of fact or a mistake of law. Specifically, the mistake is not defined in the Indian Contract Act, 1872. But what kind of mistakes can be are defined under Sections 20, 21, and 22 of the act and when the contract is void or voidable, and when the mistake will not affect the validity of the contract. All the aspects of validity of the contract are described by the Indian Contract Act, 1872 but these were discussed in many cases in India and others too.

To conclude, we have three types of mistakes the one is a mistake of fact which may be in two ways if both the parties of the contract are at the mistake, it is said bilateral mistake and if only one party of the contract is at the mistake, it is known as unilateral mistake and another one is a mistake of law. Hence, a mistake of fact can be an excuse but the mistake of law cannot be an excuse.
Indian Contract Act, 1872
Law of Contract and Specific Relief by Avtar Singh; Ninth Edition
Law of Contract Part I by R.K.Bangia; Edition 2006
Couturier v. Hastie, (1856) V House of Lords Cases (Clark’s) 673; 10 ER 1065
Ayekpam Angahal Singh v. The Union of India Manipur, High Court, 1969
Grant v. Borg, [1982] 1 WLR 638, [1982] 2 All ER 257

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