Q: Elaborate section 20 of Indian Contract Act, 1872 ?

Ans: According to section  20 of Indian Contract Act,  1872, an agreement is 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. Explanation.—An erroneous opinion as to the value of the thing which forms the subject-matter of the agreement, is not to be deemed a mistake as to a matter of fact.


Illustrations of Section 20 of Indian Contract Act, 1872: 

If Ram proposes Shyam to start the business of car manufacturing with compliance of non disclosure clause of car design, it is a proposal. 

If Shyam accepts the proposal of Ram, it is acceptance which is also a promise and if shyam promises  to do or not to do something ,it is a consideration.  

So, if both Ram and Shyam forms consideration for each other with the confidentiality clause in the agreement, it is a non disclosure agreement.  But , suppose the design of car gets burnt in the fire caught by factory and no party was aware about it at the time of agreement,  the agreement will be void. 

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