Mistake in Contract Singapore
Published on 21st December, 2015 by Benjamin Li Yong Le
A contract entered under a mistake can be void or voidable
A contract can be cancelled if one or both of the parties made the agreement under a mistake, for example, if one party agrees to sell a shipment of electronic equipment that was enroute to another country on a ship (at the time the agreement was made) but unbeknownst to the parties the electronic equipment was destroyed during a storm.
Only mistakes that lie at the heart of a contract will result in a contract being cancelled, and therefore, neither party can claim any rights or be liable to the other once the contract is cancelled.
Mistake can be classified as mutual mistake (where both parties were mistaken as to an essential term of the contract) or unilateral mistake (where only one party was not aware of the mistake).