MERCENTILE LAW

PRESENTATION

TOPIC:DIFFERENCE
BETWEEN
MISTAKES
AND

MISREPRESENTATION
 MISREPRESENTATION
1. Misrepresentation is a false
statement which the person
making honestly believes to be
true. It also includes non-
disclosure of a facts without any
intent to deceive the other party.
2. In simple we can say “False
statement but true in the eyes of
the provider”.
• EXAMPLE: A, while selling his mare
to B , tells him that the mare is
sound. A genuinely believes the mare
to be sound although he has no
sufficient ground for the for the
belief. Later on B finds the mare to
be unsound. The representation
made by A is a Misrepresentation.
Sec. 18 defines
‘misrepresentation’
A. When a person asserts that a fact is
true when his information does not
warrant it to be so , though he
believes it to be true.

C. In case of breach of duty by a

person which benefits to him by
misleading another to his prejudice.
 Consequences of
Misrepresentation
• The aggrieved party can do the
following:
II. Avoid or rescind (not valid) the
contract.
III. He can accept the contract in case
he shall be present in the original
position.
 MISTAKE
• Mistake may be defined as an
erroneous belief about something.

• In simple way we can say mistake-

“False notion of a thing or a fact
material to the contract”.
Types of Mistake and sub-
mistakes
 Bilateral mistakes
• Where both the parties to an
agreement are under a mistake as to
a matter of fact essential to the
agreement, is bilateral mistake. In
such case, the agreement is
void.(Sec. 20)
• Two condition have to fulfilled for the
application of Sec.20
 Unilateral Mistake

• When in a contract only one of the

parties is mistaken regarding the
subject-matter or in expressing or
understanding the terms or the legal
effect of the agreement, the mistake is
a unilateral mistake .
• A unilateral mistake is not allowed as a
defense in avoiding a contract unless
the mistake is brought about by the
other party’s fraud or misrepresentation