Mistake in general

‘Mistake’ means an erroneous view adopted by the parties

to a contract as to a matter of fact or to any law. On this
basis ‘mistake’ may either be—
I. Mistake as to the facts and
II. Mistake as to laws.
Mistake of facts:
It refers to the situations when the parties to a contract, either
jointly or individually, hold mistaken view as to the subject
of the contract. The mistake either be bilateral or unilateral.

20. Agreement void where both parties are under mistake as

to matter of fact--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.

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.
Mistake of law :
An agreement caused by mistake of law is not a nullity and hence be
binding upon the parties.

21. Effect of mistakes as to law--A contract is not voidable because it

was caused by a mistake as to any law in force in [Bangladesh],
but a mistake as to a law not in force in [Bangladesh] has the
same effect as a mistake of fact.

A and B make a contract grounded on the erroneous belief that a

particular debt is barred by the Bangladesh Law of Limitation: the
contract is not voidable. But any such incorrect view in relation to a
foreign law is null and void.
Lawful object and consideration:
The third requirement for the formation of a contract is that the
parties must contract for a lawful object and also for a lawful
consideration. The Act defines what object and consideration are
lawful. Section 23 of the Act states that the object or
consideration of an agreement is unlawful

(1) if it is forbidden by law; or

(2) is of such a nature that, if permitted, it would defeat the provisions
of any law ; or
(3) if it is fraudulent ; or
(4) if it involves or implies injury to the person or property of another ;
or
(5) if the Court regards it as immoral, or opposed to public policy.
Agreements expressly declared to be void :

As declared by Section 10 that an agreement to be enforced under

law of Bangladesh must not be one which is 'expressly declared' to
be void by the Act.

A. Agreements in restraint of marriage (Sec. 26).

B. Agreements in restraint of trade (Sec. 27).
C. Agreements in restraint of legal proceedings (Sec. 28).
D. Agreements the meaning of which is uncertain (Sec.29).
E. Agreements by way of wager (Sec. 30).
F. Agreements contingent on impossible events (Sec.36).
G. Agreements to do impossible acts (Sec. 56).
Discharge of contract :
A contract imposes certain obligations on either parties which they
agree to perform by entering into the contract.

“Discharge of contract” refers to the state of a contract when law

deems it not to be in existence any more. A contract, under the
scheme of the Contract Act, 1872 (in short “Act”), may stand
discharged either by performance, mutual agreement, subsequent
illegality/impossibility or by breach.

If the contract is discharged by fault of one of the parties, i.e. by

breach, the injured party may be entitled to a host of remedies,
such as, rescission of contract, damages/compensation, specific
performance of contract etc.
Discharge of contracts by performance:

Primarily the contracts are discharged with the performance of the

promises by both parties. The performance of promises either be
1) Actual or
2)Tendered/attempted.

Actual performance: A contract is said to have been actually

performed when both parties fulfil their part of the bargain.

Tender of performance: A promisor may also be excused to perform

his promises although he does not actually perform the contract.
It is so when the promisor offers his performance but cannot
complete it because of the non-acceptance by the promisee, the
promisor is under no obligation to perform the promise once again
and it is technically referred to as “tender of performance”.
Discharge of contracts by performance:

Rules for performance of contract:

1. Person to perform the contract: All promises in a contract shall

be performed by the promisor himself or by his representative
or under their supervision, as the case may be.
2. Manner of performance: The Act leaves upon the parties to
determine the manner, i.e. time, place, process etc., in which a
promise is to be performed. Therefore, if the contract stipulates
the manner in which the promise is to be performed, the
performance of the promise in manner other than that
prescribed shall not be valid unless accepted by other party
without protest.