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Under section 20 of the Indian Contract Act, 1872, what is the status of an agreement when both parties…

Section 20 makes an agreement void when both parties are mistaken as to a fact essential to it. The rule depends on the essential nature of the fact. The section excludes an…

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Under section 20 of the Indian Contract Act, 1872, what is the status of an agreement when both parties are mistaken about a fact essential to it?

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Answer and explanation

Correct answer B

Section 20 makes an agreement void when both parties are mistaken as to a fact essential to it.

The rule depends on the essential nature of the fact. The section excludes an erroneous opinion about the value of the subject matter from its notion of factual mistake.

Option feedback

Option A

The essential mutual mistake defeats enforceability under section 20.

Option B

The statutory consequence is that the agreement is void.

Option C

Section 20 does not give a party an election to avoid an otherwise binding contract.

Option D

Section 20 makes the agreement void. Neither party can enforce it as a contract.

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