A and B both believe that a particular kind of rice is being sold in the market@Rs.3000 per quintel and A sells rice of that kind to B @3000/quintel. But in fact, the market price was Rs.4000, the contract is

Question

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The contract is valid because both parties were in agreement about the terms at the time of the contract, despite their mutual mistake regarding the market price. A contract is not invalidated simply because both parties share a mistaken belief about an external fact, as long as the essential elements of a contract (offer, acceptance, intention to create legal relations, and consideration) are present.

A and B Both Believe That a Particular Kind of Rice