UNITEDWORLD SCHOOL OF LAW

TOPIC: MISTAKE OF LAW

SUBMITTED BY:

MAHEK RAVAL

ROLL NO. 31

SUBJECT: LAW OF CONTRACT- 1

SECTION: 2(B)

SUBMITTED TO:

PROF. NISHTHA AGRAWAL

 Declaration

“The text reported in the project is the outcome of my own effort and no part of this project
assignment has been copied in any unauthorized manner and no part of it has been
incorporated without due acknowledgement”

Mahek Raval
Table of contents
Introduction:...........................................................................................................................5

Topic: mistake of law.............................................................................................................5

Meaning:................................................................................................................................5

Mistake of foreign law:..........................................................................................................6

Mistake of Indian law:...........................................................................................................6

General principle:...................................................................................................................7

Mistake of non-governing law in the US:..............................................................................8

Exceptions..............................................................................................................................8

Mistake with regard to a foreign law (blog.ipleader, n.d.).................................................8

Mistake with regards to a private right..............................................................................8

Mistake of law as defence:.....................................................................................................9

Case laws of mistake of law:..................................................................................................9

Couturier v. Hastie.............................................................................................................9

Griffith v. Brymer............................................................................................................10

McRae v. Commonwealth disposals commission............................................................10

Cooper v. Phibbs .............................................................................................................10

Conclusion:..........................................................................................................................11

Bibliography.........................................................................................................................11
Cases

Cooper v. Phibbs......................................................................................................................10
Couturier v. Hastie.....................................................................................................................9
grant v. Borg...............................................................................................................................6
Griffith v. Brymer....................................................................................................................10
McRae v. Commonwealth disposals commission....................................................................10
Introduction:
A contract is a legally enforceable agreement between two or more parties where each
assumes a legal obligation that must be completed. Many aspects of daily life involve
contracts, including buying property, applying for a car loan, signing employment-related
paperwork, and agreeing to terms and conditions when buying products and services or using
computer software.1[ CITATION cas1 \l 16393 ]

Legal issues involving contracts arise most often when one party fails to perform the legal
obligation it has agreed to do. When a party breaches a contract by failing to perform, the
other party can often sue for money damages, or, in some limited cases, can ask the court to
force the other party to perform as promised.2 [ CITATION stu \l 16393 ]

Contracts can also be the source of legal disputes when they are not written clearly.
Parties who misunderstand the terms of their agreement may sue each other and have a court
settle the argument. Additionally, when a company signs a contract and later goes out of
business or is unable to fulfil its promises, the other party may have to pursue legal action in
civil or bankruptcy court to obtain relief.3[ CITATION fin \l 16393 ]

Terms to know:

 Contract – An agreement between two or more parties that creates in each party a
duty to do or not do something, and the right to performance of the other party’s duty
or a remedy for a breach
 Breach – Failure to perform an obligation created by a promise or contract, without
justification or excuse
 Performance – The action or omission required to fulfil a promise or obligation
 Specific Performance – An equitable remedy that requires a breaching party to fulfil
the exact terms of the contract; used when monetary damages are insufficient or
inadequate, such as for the breach of a sale of real estate
 Offer – A proposal for an agreement that another party may accept upon receipt to
form a legally binding contract
 Acceptance – An approval, often required to be in writing, of an offer that forms a
legally binding contract

Topic: mistake of law

Meaning:
Mistake is an erroneous believe. Mistake of law may be a judicial principle pertaining
to one or more errors that were made by an individual in understanding how the applicable
law applied to their past activity that's under analysis by a court. In jurisdictions that use the
term, it's differentiated from mistake of fact.

1
https://www.casrilanka.com/casl/images/stories/EDBA/contract%20law.pdf
2
https://www.studocu.com/row/document/wisconsin-international-university-college/law-of-tort/lecture-
notes/contracts-law-lecture-notes-3-5/6069121/view
3
https://hirealawyer.findlaw.com/choosing-the-right-lawyer/contracts-law.html
 There is a principle of law that “ignorance of the law is no excuse”. In criminal cases,
an error of law isn't a recognized defence, though such an error may in very rare instances
full under the legal category of exculpation. In criminal cases an error of fact is generally
called simply, “mistake”.4[ CITATION wik1 \l 16393 ]

Mistake of law means any contract which is performed by parties without knowing
the law, which is essential for that contract. Section 21 of the Indian contract act deals with
“effect of mistake as to law”.5[ CITATION blo \l 16393 ]

In grant v. Borg6 case, the person was not knowing the clauses of the immigration act
1971, for staying beyond the time limit by the leave. Here, he cannot apply for defence under
the mistake of law.

Mistake of law can be of two types:

1. Mistake of Indian law

2. Mistake of foreign law

Mistake of foreign law:

If a person takes part in a contract without knowing any specific provisions of foreign
law, then that mistake is treated as a mistake of fact i.e. the contract is void if both the parties
under a mistake as to a foreign law because one cannot be expected to know the law of other
foreign countries.7[ CITATION blo \l 16393 ]

Mistake of Indian law:

“Ignorantia juris non excusat” is Latin maxim which means “ignorance of the law is
not excused”. If a person takes part in a contract without knowing any specific provisions of
Indian law, then contract is not voidable because everyone is supposed to know the law of his
countries.

For example: according to the Indian law, we have to recover the loan amount within
3 years from due date, after that time-barred debt is imposed. Now if we do not show any
interest in the recovery of loan amount during these 3 years because of not knowing the law,
than we cannot take it up as an excuse or defence. If a murdered b, A cannot apply for the

4
https://en.wikipedia.org/wiki/Mistake_of_law
5
https://blog.ipleaders.in/mistake-under-contract-law/
6
MANU/UKHL/0010/1982
7
https://blog.ipleaders.in/mistake-under-contract-law/
defence of mistake of law that is; he was not aware of law related to the murder. 8
[ CITATION blo \l 16393 ]

General principle:
Usually, there is in legal cases an irrefutable presumption that people who are about to
engage in an activity will comply with applicable law. As part of the rule of law, the law is
assumed to be made available to everyone. The presumption of knowledge of applicable law
generally will also apply me the situation of a recent change in the law with which a party in
a legal case had no opportunity to become aware of it e.g. the accused was out hunting in the
wilderness and did not know that the law had changed to protect an endangered species. 9
[ CITATION wik1 \l 16393 ]

Some states make a distinction between a mistakes as to the substance and effect of
existing laws, and a mistake that the law creates a specific right to act in the particular way.
For example, if a, the owner of a vehicle, takes it into a garage for repair and when returning
to collect it, a finds that the vehicle has been left parked in the street. If he has an honest
belief that the vehicle without paying the outstanding bill for the repairs, he will not be
considered as stealing it despite the fact that the garage holds a lien over the vehicle and so
has the better right to possession until the bill is paid. This form of the defence is difficult to
prove because the defendant must be able to act in that way. Under the theft act 1968 and the
criminal damage act 1971, a defence will arise if the defendant honestly believes that he is
entitled to act in the way he did and this will negate the relevant mens rea element. In
chamberlain v. Lindon 1998 Lindon demolished a wall to protect a right-of-way, despite
allowing nine months to pass before acting, Lindon honestly believed that it was immediately
necessary to protect his legal rights without having to resort to civil litigation. Thus a lawful
excuse may be acknowledged by a court to arise when a person honestly but mistakenly
believes that the actions are necessary and reasonable.

Mistake of non-governing law in the US:

One narrow area of exception occurs where a person makes a mistake of non-
governing law. While the accused are not pardoned for failure to know what acts have been
deemed criminal, they may not beheld to know of non-criminal provisions that affect the
status of things that might therefore be deemed criminal. For example suppose Jennifer is

8
https://blog.ipleaders.in/mistake-under-contract-law/
9
https://en.wikipedia.org/wiki/Mistake_of_law
married to Phillip, but decides to get a divorce in order to marry ben. However, Jennifer
mistakenly believes that the divorce was final when she submitted the paperwork required by
the state and did not realize that she had to wait for a court to pronounce her divorce from the
first was complete. Jennifer’s mistake was not one of governing law, but rather a mistake of
non-governing law, which is akin to a mistake of fact. Depending on the jurisdiction in which
the act took place, Jennifer may be allowed to raise the defence of mistake of law is such a
scenario.10[ CITATION wik1 \l 16393 ]

Exceptions
Mistake with regard to a foreign law11[ CITATION blo1 \l 16393 ]

Section 21 also specifies that a mistake regarding a foreign law shall be treated as a
mistake of fact. This is because the parties to the contract are not expected to know all the
provisions of the foreign law and their meaning. Therefore in case of a mistake of the foreign
law by both the parties, the contract will be considered as void.
For example, an Indian company agrees to sell an American company 200 cans of a
certain mixture containing 45% sulphuric acid. The law of the country had banned the
purchase and sale of mixtures containing more than 30% sulphuric acid. This is considered to
be a mistake of foreign law and therefore the contract is said to void.

Mistake with regards to a private right12

The existence of any private right is a matter of fact although depending on the rules of
law because it is not possible for a party to fully know the private rights of another party.
In the case of cooper v. Phibbs, the plaintiff took a lease of fishery right from the
defendant unaware of the fact that he already had a life interest in the fishery right. The
plaintiff, therefore, brought a suit for the cancellation of the lease and the defendant argued
that this was a mistake of law. It was held that a mistake as to the general ownership or right
stands on the same footing as a mistake of law and therefore was declared void.

Mistake of law as defence:13

Mistake of law is a defence that the criminal defendant misunderstood or was ignorant
of the law as it existed at the time. The onus is generally placed on individuals to be aware of
the laws of their state or community, and thus this defence only applies in very limited
10
https://en.wikipedia.org/wiki/Mistake_of_law
11
https://blog.ipleaders.in/mistake-of-fact-and-mistake-of-law-under-the-indian-contract-act1872/
12
https://commerceiets.com/mistake-in-contract-law/
13
https://www.justia.com/criminal/defenses/mistake/
circumstances. For example, while a defendant will not be able to claim that he was not
aware that murder was a crime, he may be able to argue that he was not aware of some
obscure traffic law, specifically, mistake of law can be used as a defence in four limited
circumstances:

 When the law has not been published;

 When the defendant relied upon a law or statute that was later overturned or deemed
unconstitutional;
 When the defendant relied upon a judicial decision that was later overruled; or
 When the defendant relied upon a interpretation by an applicable official.

Additionally, the defendant’s reliance on any of these sources must have been reasonable,
much like mistake of fact. Thus, a defendant cannot claim that he was relying on a case from
200 years ago when it is apparent that there have been subsequent developments in the law.

It is also important to note that, while reliance on an interpretation of an official may

include judge or federal or state agencies, it does not include reliance on the statement of a
private attorney. It is therefore important to ensure that any attorney from whom you obtain
advice is knowledgeable and trustworthy.

Case laws of mistake of law:

Couturier v. Hastie14

The plaintiff merchant shipped a cargo of Indian corn and sent the bill of landing to their
London agent, who employed the defendant to sell the cargo. On 15 may 1848, the defendant
sold the cargo to challender on credit. The vessel had sailed on 23 February but the cargo
became so heated and fermented that it was unfit to be carried further and sold. On May 23
challender gave the plaintiff notice that he repudiated the contract on the ground that at the
time of the sale to him the cargo did not exist. The plaintiffs brought an action against the
defendant to recover the purchase price. Martin b ruled that the contract imported that, at the
time of sale, the corn was in existence as such and capable of delivery, and that, as it had
been sold, the plaintiffs could not recover. This judgement was affirmed by the House of
Lords.

Griffith v. Brymer15

14
[1856] UKHL J3
15
1903 19 T.L.R. 434
 At 11am on 24 June 1902 the plaintiff had entered into an oral agreement for the hire of a
room to view the coronation procession on 26 June. A decision to operate on the king, which
rendered the procession impossible was taken at 10am o 24 June. Wright j held the contract
void. The agreement was made on a missupposition of facts which went to the whole root of
the matter, and the plaintiff was entitled to recover his £100.

McRae v. Commonwealth disposals commission16

The defendant sold an oil tanker described as lying on Jourmand reef off Papua. The
plaintiffs incurred considerable expenditure in sending a salvage expedition to look for the
tanker. There was in fat no oil tanker, nor any place known as Jourmand reef. The plaintiffs
brought an action for (1) breach of contract, (2) deceit, and (3) negligence. The trial judge
gave judgement for the plaintiff in the action for deceit. He had that couturier v. Hastie
obliged him to hold that the contract of sale was void and the claim for breach of contract
failed. Both parties appealed the high court of Australia stated that it was not decided in
couturier v. Hastie that the contract in that caser was void. The question whether it was void
or not did not arise. If it had arisen, as in an action by the purchaser for damages, it would
have turned on the ulterior question whether the contract was subject to an implied condition
precedent. In the present case, there was a contract, and the commission contracted that a
tanker existed in the position specified. Since there was no such tanker, there had been a
breach of contract, and the plaintiffs were entitled to damages for that breach.

Cooper v. Phibbs 17

An uncle told his nephew, not intending to misrepresent anything, but being in fact in
error, that he was entitled to a fishery. The nephew, after the uncle’s death, acting in the
belief of the truth of what the uncle had told him, entered into an agreement to rent the
fishery from the uncle’s daughters. However, the fishery actually belonged to the nephew
himself. The House of Lords held that the mistake was only such as to make the contract
voidable. Lord Westbury said “if parties contract under a mutual mistake and
misapprehension as to their relative and respective rights, the result is that agreement is liable
to be set aside as having proceeded upon a common mistake” on such terms as the court
thought git to impose; and it was so set aside.

16
[1951] 84 CLR 377
17
[1867] UKHL 1
Conclusion:
Mistake of law means contract which is performed by both the parties without
knowing the law, which is essential for the contract. Section 21 of Indian Contract of Law
deals with “effect of mistake as to law”. Not knowing foreign law is considered as mistake
but if any person says that he is not aware with his country’s law is not mistake of law. If
person A killed B than he cannot say that he is not aware to the law. It is consider as murder
and he is punished under section 302 of IPC. Law assumed that every person knows his
country’s law. If one company sign contract with foreign company. If law of company B’s
country banned some kind of contract than it is consider as mistake of law. Because law
assumed that company A is not knowing the law of company B’s country. Ignorance of law is
not excuse, if any person takes part in contract without knowing special provision of Indian
law, than contract is not void because law assumed that everyone knows his country’s law.

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