Question

Apply the given legal principles to the facts provided in the following of the question and select the most appropriate answer.
Principle : In relation to the law of contracts, in instances where both parties to an agreement are under a mistake about a matter of fact essential to the agreement, the agreement is void.
Facts : L agrees to sell to M a consignment of food grains which was supposed to be on a ship on its way from Africa to Mumbai. However, two days before the agreement was reached, the ship carrying the grains met with an accident and all the goods were lost. L’s agent had informed L about this on the day the accident happened. Is the agreement void because of a mistake as to a matter of fact ?

• A. Yes, since both parties committed a mistake by entering into the contract
• B. No, since L had dishonest intentions
• C. No, since L was aware that the goods were lost
• D. None of the above

Answer 1

Answer: (C)

No, since L was aware that the goods were lost

Answer 2

The correct option is (C) : No, since L was aware that the goods were lost.