Section 22 of Indian Contract Act
22. Contract caused by mistake of one party as to matter of fact.— 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.
Final Thoughts
Introduction
Contracts are agreements made between two or more parties. But sometimes, one party may enter into a contract by mistake, especially about some fact related to the agreement. In Indian law, such situations are handled under the Indian Contract Act, 1872.
Section 22 deals with unilateral mistake — where only one party is mistaken about a fact. This section explains whether such a contract is valid or not.
Meaning of ‘Mistake’ in Contract Law
In contract law, a mistake means a wrong belief about something related to the contract. It can be about:
- Facts related to the agreement (e.g., price, identity, existence of subject matter)
- Or law (but mistake of law is treated differently)
Types of mistake:
- Bilateral mistake – Both parties are mistaken (covered under Section 20)
- Unilateral mistake – Only one party is mistaken (covered under Section 22)
Unilateral Mistake – Explained
A unilateral mistake happens when only one party misunderstood a fact while the other party knew the correct fact. According to Section 22, such a mistake does not make the contract voidable. This means the party who made the mistake cannot cancel the contract only on the basis of their own misunderstanding.
Legal Effect of Unilateral Mistake
Section 22 clearly says:
- If only one party makes a mistake of fact, the contract remains valid.
- The mistaken party cannot avoid the contract just because of their personal misunderstanding.
- But exception can apply if:
- The other party knew or caused the mistake.
- The mistake is about the nature of the contract or identity of the other party (in rare cases).
Section 22 vs Section 20 – Comparison
| Basis | Section 20 (Bilateral Mistake) | Section 22 (Unilateral Mistake) |
|---|---|---|
| Number of parties mistaken | Both parties | Only one party |
| Result | Contract is void | Contract is valid |
| Subject | Mistake of fact essential to agreement | Mistake of fact by one party |
| Example | Both think goods exist, but they don’t | Only one party misunderstood price |
Illustrations and Examples
Example 1: A agrees to sell a car to B. A thinks the car is in perfect condition. But it already had a major engine fault before the agreement. B knows this fact. This is a unilateral mistake by A. The contract is still valid under Section 22.
Example 2: X signs a contract to buy a painting believing it is original, but it is a copy. The seller did not say it was original. X made a mistake of fact, but only X was mistaken. As per Section 22, contract is not voidable.
Conclusion
Section 22 of the Indian Contract Act protects contracts from being easily broken just because one party made a mistake of fact. It keeps contracts stable and fair by ensuring that:
- Only a mutual mistake (Section 20) can make a contract void.
- A single party’s mistake (Section 22) cannot be a ground to cancel a valid contract.
However, if the mistake is caused by fraud, misrepresentation, or is about very fundamental facts, the court may still interfere.