Indian Contract Act Section 21 — Effect of mistakes as to law

CHAPTER II OF CONTRACTS, VOIDABLE CONTRACTS AND VOID AGREEMENTS

Commercial / Corporate

Summary

A contract cannot be set aside just because it was entered into due to a mistake about a law that is currently in force in India. In other words, if you misunderstand an existing Indian law and sign a contract based on that misunderstanding, the contract still stands and is not voidable on that ground alone.

However, if the mistake is about a law that is not in force in India, then that mistake is treated the same as a mistake of fact. This means such a mistake can have the same legal effect as a factual error, which may make the contract voidable, depending on the circumstances.

Official Text

A contract is not voidable because it was caused by a mistake as to any law in force in 1[India]; but a mistake as to a law not in force in 1[India] has the same effect as a mistake of fact. 2* * * * * Illustration