A misrepresentation means a misstatement or an inaccurate statement pertaining to any material fact in the contract. A contract where the consent is obtained by misrepresentation is voidable at the option of the aggrieved party.
Section 18 of the Indian Contract Act states "Misrepresentation means and includes -
the positive assertion, in a manner not warranted by the information of the person making it, of that which is not true, though he believes it to be true.
any breach of duty which, without any intent to deceive, gains an advantage to the person committing it, or any one claiming under him, by misleading another to his prejudice, or to the prejudice of any one claiming under him;
causing, however innocently, a party to an agreement, to make a mistake as to the substance of the thing which is the subject of the agreement.
Effect of Misrepresentation
Any party who has entered into a contract by misrepresentation may
avoid the agreement
insist that the contract be performed by putting him in a position in which he would have actually been had the representation be true.
v) Mistake
An erroneous belief about something may be termed as a mistake.
Section 20 of the Indian Contract provides:
"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."
mistake may be of two types:
Mistake of Law
Mistake of Fact
Mistake of Law is based no the principle of 'Ignorantia Juris Non Excusat' which means ignorance of law is no excuse. A party is not entitled to any relief on the plea that an act has been done in ignorance of the law.
Mistake of fact may be either a bilateral mistake or even a unilateral mistake.
In an agreement where both the parties are under a mistake as to a matter of fact essential to the agreement, it is deemed to be a case of bilateral mistake.
In a contract where only one of the parties has committed a mistake regarding the subject-matter or any legal effect or consequence of such agreement or in understanding or expressing any terms or conditions of the contract, the mistake is said to be a unilateral mistake.
Some common forms of mistake are enumerated herein below:
Mistake as to the identity of the person contracted with
Mutual mistake as to the existence of a thing
Mutual mistake about the identity or quantity of a thing
Mutual mistake as to the actual subject matter of the contract
Mistake in relation to the nature of the transaction of the contract
