Section 66 The Indian Contract Act, 1872
Section 66 – The Indian Contract Act, 1872
Text of Section 66:
"Effect of mistake as to a law in force in India."
“A contract to do an act which, at the time of making the contract, is impossible, becomes void if the impossibility arises from a mistake as to the law in force in India.”
Key Elements
Mistake of Law
Section 66 deals with contracts made under a mistake about Indian law.
If a person enters a contract thinking a certain law allows or prohibits an act, and that assumption is wrong, Section 66 may apply.
Effect on the Contract
The contract may become void if the mistake renders the performance impossible.
The law distinguishes mistake of law from mistake of fact (Sections 20–22 cover mistakes of fact).
Applicability
Only applies to laws in force in India at the time of contract formation.
Does not cover foreign laws or laws not yet enacted.
Illustration
Suppose A contracts to pay B a tax that A believes is not payable, due to a mistaken understanding of Indian tax law.
If the law clearly required that payment, the contract based on that mistake may be void under Section 66.
Judicial Interpretation
Some key principles from Indian courts:
Mistake must relate to existing law
Ignorance of a law, or misunderstanding its provisions, can void a contract only if it makes the act impossible.
Performance must be impossible
A mere financial burden or disadvantage caused by a mistake about law does not make the contract void; the act must be impossible to perform.
Contrast with mistake of fact
Mistake of fact (Sections 20–22) covers wrong assumption about facts, whereas Section 66 covers wrong assumption about law.
Practical Implications
Section 66 is rarely invoked because:
Courts generally assume everyone knows the law in India.
Contracts are not void merely due to ignorance of law, unless it makes performance literally impossible.
Useful in cases involving:
Regulatory compliance contracts
Taxation obligations
Licenses and permits
Contracts with statutory restrictions
Key Takeaways
| Aspect | Details |
|---|---|
| Nature | Deals with mistake as to Indian law |
| Effect | Contract may be void if performance is impossible |
| Limitation | Only applies to laws in force in India |
| Difference | Mistake of fact vs. mistake of law |
| Practicality | Rarely invoked; courts presume knowledge of law |
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