Where Both Parties Are under Mistake as to Matter of Fact the Agreement Will Be Mcq

When two parties enter into an agreement, they do so with the intention of fulfilling certain obligations. However, in some cases, both parties may be mistaken about a particular fact that is integral to the agreement. This is known as a mistake of fact.

One type of mistake of fact is known as «where both parties are under mistake as to matter of fact.» In this scenario, both parties have made an error in judgment regarding a particular fact, and this mistake has influenced their decision to enter into the agreement. In such cases, it is important to determine how the mistake will affect the legality and enforceability of the agreement.

The answer to this question lies in the doctrine of mutual mistake. According to this doctrine, if both parties are under a mutual mistake of fact, the agreement will be voidable. This means that either party can choose to cancel the agreement if they discover the mistake. However, if the parties continue to perform their obligations under the agreement, it will become binding and enforceable.

To understand this principle more clearly, let us take an example. Suppose that two parties, Alice and Bob, enter into a contract for the sale of a vintage car. Both parties believe that the car was owned by a famous celebrity, and this belief is a key factor in their decision to enter into the agreement. However, later they find out that they were mistaken, and the car did not belong to the celebrity.

In this case, both parties were under a mutual mistake as to the ownership of the car. According to the doctrine of mutual mistake, the agreement between Alice and Bob will be voidable. Either party can choose to cancel the agreement because of the mistake. However, if they continue to perform their obligations under the agreement, it will become binding and enforceable.

In conclusion, a mistake of fact can have a significant impact on the legality and enforceability of an agreement. If both parties are under a mutual mistake as to a particular fact, the agreement will be voidable. However, if they continue to perform their obligations under the agreement, it will become binding and enforceable. As such, it is important to carefully consider all relevant facts and information before entering into any agreement.