Indian Contract Act, 1872 · Chapter II: Of Contracts, Voidable Contracts and Void Agreements
Section 21: Effect of mistakes as to law
In plain words
A contract is not voidable because of a mistake about a law in force in India. A mistake about a foreign law is treated like a mistake of fact.
A simplified explanation, prepared with AI assistance from the official text below and checked automatically against it for numbers and cross-references. The official text is the law and prevails over this summary. Not legal advice.
Read the in-depth explanation, with key Supreme Court rulings ↓
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
A and B make a contract grounded on the erroneous belief that a particular debt is barred by the Indian Law of Limitation; the contract is not voidable.
3 * * * * *
Source: India Code (indiacode.gov.in), the consolidated text published by the Legislative Department, Government of India. Text as updated on India Code on 15 October 2026. Words in square brackets [ ] were inserted or substituted by later amending Acts, and *** marks words omitted by an amendment. The amendment footnotes are not reproduced here. Official text on India Code.
Understanding this section
Section 21 says a contract is not voidable because it was caused by a mistake as to any law in force in India; but a mistake as to a law not in force in India has the same effect as a mistake of fact.
Key points
- Everyone is presumed to know Indian law, so a mistake about it does not affect the contract.
- Foreign law is treated as a fact; a mutual mistake about it can make the agreement void under section 20.
- The illustration: parties who wrongly believe a debt is time-barred under Indian law cannot avoid the contract on that ground.
Compare section 72
Section 21 is about the validity of a contract. Recovery of money paid under a mistake is a different question, governed by section 72, and there the Supreme Court has held that 'mistake' includes a mistake of law.
Common mistakes
- Using section 21 to deny recovery of money paid under a mistake of law; that is a section 72 question.
Read with: Section 20 Indian Contract Act, 1872, Section 72 Indian Contract Act, 1872
Prepared with AI assistance as a study aid. Every ruling listed was checked against the Supreme Court's own judgments on this site, and quoted words appear in those judgments; linked names open the full judgment. Read the judgments themselves before relying on them. Not legal advice.