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The Indian Contract Act

The Indian Contract Act

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Published by Louie Hansen

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Published by: Louie Hansen on Jan 19, 2012
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08/20/2015

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Intention

There is no intention to deceive
the other party. It is innocently
made.

There is an intention to deceive
the other party. It is deliberate or
wilful.

Belief

The person making the
representation believes to be
true.

The person making the
representation does not believe it
to be true or makes it recklessly
without caring as to whether it is
true or false.

Tort

Simple misrepresentation is no
tort.

It is a cause of action in tort for
damages.

Rescission
and damagesThe aggrieved party can rescind
the contract or sue for restitution.
However, there can be no suit
for damages.

The aggrieved party can rescind
the contract and also sue for
damages.

Discovery of
truth

The aggrieved party cannot
avoid the contract if he had the
means to discover the truth by
ordinary diligence.

Where there is active
concealment, contract is voidable
even though aggrieved party had
the means to discover the truth
with ordinary diligence.

* * * * *

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32

Mistake : an erroneous belief about something - may be mistake of law or a mistake
of fact.

Sec.20 – where both parties are under mistake as to matter of fact essential to the
agreement – the agreement is void.

Sec.20 will come into play when –
(1)both the parties to an agreement are mistaken;
(2)their mistake is as to a matter of fact;
(3)the fact about which they are mistaken is essential to the agreement.

Sec.21 – a contract is not voidable because it was caused by mistake of law of the
country. However, mistake as to law of a foreign country is treated as mistake of fact
and makes the contract void.

Sec.22 – a contract is not voidable merely because it was caused by mistake of one
party as to matter of fact.

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