What is Section 20 of the contract Act 1872?
Asked by: Kathryn Treutel | Last update: March 11, 2026Score: 4.2/5 (27 votes)
Section 20 of the Indian Contract Act, 1872, declares that an agreement is void (unenforceable from the start) if both parties are under a mistake of fact that is essential to the contract, such as the non-existence or destruction of the subject matter, provided neither party knew of the mistake at the time of agreement. The key is a mutual mistake about a fundamental fact, not just an opinion on value, making true consent impossible.
What is Section 20 of the Contract Act?
20. Agreement void where both parties are under mistake as to matter of fact. 21. Effect of mistakes as to law.
What is the main purpose of the Contract Act 1872?
The Indian Contract Act, 1872 governs the law of contracts in India and is the principal legislation regulating contract law in the country. It is applicable to all states of India. It outlines the circumstances under which promises made by the parties to a contract become legally binding.
What is Section 20 specific performance?
SECTION 20 OF SRA PROVIDES SPECIFIC PERFORMANCE. Section 20 of the Specific Relief Act, 1963(as it stood before amendment) provided that the court has the discretion to grant specific performance of contract and it is not bound to grant such relief solely because it is lawful to do so. “Substituted performance”.
What is Section 20 of the Negotiable Instrument Act?
Where one person signs and delivers to another a paper stamped in accordance with the law relating to negotiable instruments then in force in India, and either wholly blank or having written thereon an incomplete negotiable instrument, he thereby gives prima facie authority to the holder thereof to make or complete, as ...
SECTION 20, 21 AND 22 OF INDIAN CONTRACT ACT 1872 || LAW EXPLORER
What is section 20?
Under Section 20, a child may be accommodated by the local authority if they have no parent or are lost or abandoned or where their parents are not able to provide them with suitable accommodation at that time.
Who cannot negotiate a negotiable instrument?
A negotiable instrument may be negotiated (except by the maker, drawee or acceptor after maturity) until payment or satisfaction thereof by the maker, drawee or acceptor at or after maturity, but not after such payment or satisfaction.
What is the most common remedy for a breach of contract?
An award of compensatory damages is the most common of the legal remedies for breach of contract. The calculation of compensatory damages is based on the actual losses you have sustained as a result of the breach of contract.
What is Section 20 A of the Specific Relief Act?
20A Special provisions for contract relating to infrastructure project - (1) No injunction shall be granted by a court in a suit under this Act involving a contract relating to an infrastructure project specified in the Schedule, where granting injunction would cause impediment or delay in the progress or completion of ...
What is Section 20 of the Contracts Act 1950?
The effect of an agreement tainted by undue influence is spelt out in Section 20 of the Contracts Act 1950 to be voidable at the option of the party whose consent was so caused.
What are the 7 rules of contract law?
While there isn't a universal "7 Laws of Contract," most legal systems agree on 7 Essential Elements for a Valid Contract: an Offer, Acceptance, Consideration, Capacity (competent parties), Legality (lawful purpose), Mutual Assent (meeting of the minds), and sometimes Certainty or a Written Form, ensuring a clear, voluntary exchange of value for a lawful purpose.
What are common contract mistakes to avoid?
Contract Drafting: Common Pitfalls to Avoid
- Ambiguous Language. The Issue. ...
- Failure to Specify Key Terms. The Issue. ...
- Inadequate Consideration. ...
- Lack of Intention to Create Legal Relations. ...
- Neglecting Governing Law and Jurisdiction. ...
- Ignoring Termination Clauses. ...
- Over-Reliance on Boilerplate Clauses. ...
- Failing to Review and Proofread.
What is a mistake under the Indian Contract Act?
The section states, “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.” Unilateral Mistake (Section 22): This arises when only one party is mistaken. Generally, a unilateral mistake does not render a contract void.
What is Section 20 of the contract Labour Act?
Short Summary Section 20 of the Contract Labour (Regulation and Abolition) Act, 1970, addresses the responsibility of the principal employer to ensure certain amenities are provided to contract laborers in cases where the contractor fails to do so.
What makes a contract legally binding?
To make a contract legally binding, it needs to include several key elements: Offer and acceptance — One party needs to offer something (money, services, rights, etc.), and the other party needs to accept the offer. Consideration — The benefit that both parties receive.
What is a mistake in contract law?
In contract law, a mistake is an erroneous belief, at contracting, that certain facts are true. It can be argued as a defense, and if raised successfully, can lead to the agreement in question being found void ab initio or voidable, or alternatively, an equitable remedy may be provided by the courts.
What is Section 20 of the Indian contract Act case law?
The maxim Ignorantia Facti Excusat which means that the Ignorance of fact excuses. Therefore under Section 20 of the Indian Contract Act, 1872, a contract is said to be void when both the parties to the agreement are under a mistake as to a matter of fact.
What is an injunction under the CPC?
Injunction is a judicial process by which a party is required to do or to refrain from doing any particular act. It is in the nature of preventive relief to a litigant to prevent future possible injury.
What is Section 20 of the Insurance contract Act?
An insurer under a contract of insurance is not relieved of liability under the contract by reason only that the names of the persons who may benefit under the contract are not specified in the policy document.
How do you win a breach of contract case?
Key Takeaways. Four Essential Elements Must Be Proven: To succeed in a breach of contract claim, plaintiffs must prove: (1) a valid contract existed with offer, acceptance, and legal intent; (2) the plaintiff performed their obligations; (3) the defendant failed to perform; and (4) the breach caused actual damages.
What are the three ways to remedy the breach?
What remedies are available?
- Compensatory damages in contract law. An award of compensatory damages is the most common legal remedy for breach of contract. ...
- Specific performance as a contract remedy, where you can ask the court to require the breaching party to complete their end of the agreement. ...
- Rescission of contract.
Can I get out of the contract?
You can get out of a binding contract under certain circumstances. There are seven key ways you can get out of contracts: mutual consent, breach of contract, contract rescission, unconscionability, impossibility of performance, contract expiration, and voiding a contract.
What destroys negotiability?
If the instrument contains a “conspicuous statement, however expressed, to the effect that the promise or order is not negotiable,” its negotiability is destroyed, except for checks, and “an instrument may be a check even though it is described on its face by another term, such as 'money order.
What are the five negotiable instruments?
Types of Negotiable Instruments
The most common ones include personal checks, traveler's checks, promissory notes, certificates of deposit, and money orders.
What is the punishment for 138 negotiable instrument Act?
Imprisonment – Up to 2 years. Fine – Up to twice the cheque amount. Both – The court can award both imprisonment and fine together.