Question

Andrew is an 80 years old aged man, who agreed to sell his house to David for 5,20,0000 Taka but he inadvertently signed the contract with David for 520,000 Taka. David is now seeking to enforce the agreement. Advise Andrew on the legal ramifications of this case and also make him aware of the essential elements of contract

Answer 1

The answer provided is based on the laws of Bangladesh.

• Is it a mistake on the part of Andrew
• Is it a mistake of law or mistake of fact
• Is David aware of mistake at the time of signing
• Is it bilateral mistake or unilateral mistake

By analysing above issues, Mistake is unilateral and is on the part of Andrew who is 80 years old. It is mistake of fact as it relates to the value of the subject matter i.e. house of the contract.

Let we assume David is not aware about the true price of the house at the time of signing the contract:

Section 22 of Bangladesh Contract act,1872 specifies 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.

The result is contract is enforceable by David and performance obligation is on the part of Andrew.

However, Andrew can argue that the price is negotiated before signing and he can't read or understand the contents of the contract regarding to the nature of subject matter due to his old age and David could aware of the mistake,can plead for voiding of the contract under section 20 of the contract act. Section 20 of the contract act reads as 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.

Other options available to Andrew:

1. He can ask David for signing of Rectification deed to the contract if David agrees for Intended price.

2. He can file a suit in the court for rescission of the contract under specific releif act.

3. He can file a suit in the court for reformation of the contract with correct price.

The Essential elements of a Contract:

1. Parties

Both buyer and Seller are capable to enter into a contract. They are not disqualified parties under section 11 of the contract act.

2. Offer and Acceptance

There is free consent between parties. The contract is not signed due to coercion, undue influence, fraud, misrepresentation or by mistake.

2. Subject matter of the contract - Asset

The subject matter must be identified and agrred iupon in the same sense. The object must be lawful.

3. Consideration

Consideration must be real and lawful. Without consideration, contract is void.

4. Representation & Warranties

5. Legal formalities

Whatever specified in the law for a valid contract should be followed.