In Kentucky, it was noted that in French Bank of California v. First National Bank of Louisville, money received accidentally does not have to be returned in the event of an irrevocable change of position. He noted that errors should only be corrected by a court order or compensation. In the event of a unilateral error, the contract can only be cancelled if it is proved that the contract was caused by fraud or misrepresentation on the part of one of the contracting parties. Otherwise, a ground for termination applies in contract law. However, it should be added that the General Court has never clearly defined the distinction between errors of fact and errors of law. Illustration – A agrees to buy a specific horse from B. It turns out that the horse was dead at the time of the negotiation, although neither party knows about it. The agreement is null and void. The maxim Ignorantia Facti Excusat, which means that ignorance of facts excuses. Therefore, under section 20 of the Indian Contract Act, 1872, a contract is declared null and void if both parties to the agreement have a material defect.
For example, Ankita agreed to buy a car in Prankur on the basis of his letter in which the price indicated was 50,000 instead of 5 lakhs due to a typo. Said agreement will be considered void due to an error in the quantity of the item. There can be two types of errors – errors of law and errors of fact. The exact demarcation between legal error and factual error is often blurred and difficult to determine. Even less clear, for example, is the situation where the parties must act in the interpretation of a private document and not in a decree or legal regulation. Illustration – The structure of a written contract is considered a case, the misinterpretation of a will has also been treated as a legal issue. An error of law may be of general law, foreign law or private law. In Cundy v Lindsay (1878), Lindsay & Co were, among others, linen handkerchief manufacturers who received an order for 250 dozen handkerchiefs from a man named Blenkarn, who imitated the signatures of “Blenkiron & Co.”, a renowned company based at “123 Wood Street”.
The man also mentioned that his address should be at 37 Wood Street, Cheapside. Lindsay and Co assumed that the order came from the famous Wood Street company and therefore delivered the order. Later, the man sold the goods to an innocent party, Cundy. When Blenkarn failed to pay for that order, Lindsay & Co sued Cundy for the goods. Lindsay and Co asserted that since they had sold the goods to Blenkarn on the wrong assumption that they were selling them to Blenkiron & Co, there was no actual agreement on the purchase agreement. .