Question

Xavier agrees to buy from Prithvi a certain dog. It turns out that the dog was dead at the time of the bargain, though neither party was aware of the fact. What is the status of this agreement?

• A. The agreement is invalid.
• B. The agreement is immoral.
• C. The agreement is void.
• D. The agreement is illegal.

Hint:

If only one party is mistaken about a fact (unilateral mistake), the contract is not voidable under Section 22.
A contract is only void when both parties share the same mistake of essential fact under Section 20.

Answer 1

The Correct Option is C

Step 1: Understanding the Question:
The question asks about the legal status of an agreement where both parties were mistaken about the existence of the subject matter (a dog) at the time they made the agreement.

Step 2: Key Legal Principles and Approach:
This scenario represents a classic case of mutual mistake regarding a fact essential to the contract.
The relevant statutory provision is Section 20 of the Indian Contract Act, 1872, which deals with bilateral mistakes of fact.

Step 3: Detailed Explanation:

• Statutory Provision: Section 20 of the Indian Contract Act, 1872, states: "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."

• Essential Elements of Section 20:

• (1) Both parties must be under a mistake (bilateral/mutual mistake).

• (2) The mistake must relate to a matter of fact, not law.

• (3) The fact must be essential to the agreement.

• Applying the Law: The subject matter of the agreement is the dog.

• Since the dog was already dead at the time the agreement was made, the subject matter did not exist.

• Because neither Xavier nor Prithvi was aware of this fact, both were under a mutual mistake regarding the very existence of the subject matter, which is a fact fundamental and essential to the agreement.

• Under Section 20, such an agreement is void *ab initio* (null and void from the beginning).

• This is supported by Illustration (g) of Section 20, which contains an identical case of buying a horse that was dead at the time of the bargain.

• Therefore, Option (C) is the correct answer.

Step 4: Final Answer:
According to Section 20 (and Illustration g) of the Indian Contract Act, 1872, a mutual mistake regarding the existence of the subject matter makes the agreement void, making Option (C) the correct answer.