Thus the contract is valid For example A bought car under belief that the car

Thus the contract is valid for example a bought car

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a matter of fact.” Thus, the contract is valid. ( For example, A bought a car under belief that the car is accident free. He would not have bought the car if it was not accident free. However, B did not represent the car was accident-free and has not contracted on the basis that the car was accident-free, the contract is valid. ) (d) A mistake as to the possibility of performing the contract - common mistake Sheikh Brothers Ltd v Ochsner (PC Eastern Africa ) [1957] Mistake made by one of the parties only s.23 1. s.23 provides that ‘ 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’. Therefore the contract would still be valid. (unilateral contracts still a valid contract. ) 2. Mistake as to the identity of the person with whom the contract is made is a mistake of one party only. By virtue s.23 , such a contract is valid and enforceable. Mistake as to law s.22 1. s.22 provides that ‘a contract is not voidable because it was caused by mistake as to any law in force in Malaysia, but a mistake as to law not in force in Malaysia (foreign law) has the same effect as a mistake of fact’. ( A and B make a contract grounded on the erroneous belief that
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a particular debt is barred by limitation, the contract is not voidable. A mistake to the foreign law is equivalent as to mistake of fact, contract thus void. ) 2. In the Indian case of Shiba Prasad Singh v Chandra Nandi [1949] , the PC held that the restoration of money paid under the mistake also includes money paid under mistake of law as provided under s.22. However, in the English case of Bilbie v Lumley [1802] , the court held that payment under mistake of law is irrecoverable is permissible where the transaction is rendered illegal under a statute which has been enacted to protect the plaintiff. Mistake S.21 s.22 s.23 Both parties mistake mistake to the law as to the fact Void Valid Relief s.66 provides that when an agreement is discovered to be void, or when a contract becomes void, any person who has received any advantage under the agreement or contract is bound to restore it, or to make compensation for it, to the person from whom he received. Only one party mistake of fact Valid
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In the Indian case of Harnath Kaur v Inda Bahadar Singh [1922] , the PC held that the agreement discovered to be void must be at its inception, i.e void ab initio. This was endorsed in the Malaysian case of Public Finance Bhd v Ehwan bin Spring [1966] , when the agreement is void, there is restitution available under s.66 but the innocent party must go to court in good faith. The issue in s.66 is the words of ‘any person’. It is totally reasonable and understandable that the contractual parties are meant to restore the benefits if they have received such advantages. However, sometimes the benefits are given by a third party. Does s.66 also require the 3rd party outside the contract to restore the benefit?
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  • Winter '17
  • Daniel

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