FREECONSENT

Anagreementinordertobev al
i
dmusthavebeenmadebyf r
eeconsentofthe
par
ti
es.I
ftheconsenti
snotfr
ee,t
heagr
eementi
svoi
dabl
eatt
heopt
ionofthepart
y
whoseconsentwasnotfr
ee.

Sec13definesthemeani
ngofconsentasfoll
ows,
“Twoormorepersonsar
esai
dto
consentwhentheyagr
eesuponthesamethingint
hesamesenseatthesamet
ime.
”

Sec14descr i
besthecaseswhenconsentisnotfr
ee.Itstatesthatconsenti
snot
fr
ee ifitcaused bycoerci
on,undue i
nfl
uence,f
raud,mi srepr
esentat
ion,f
raud,
mistake.I
ftheconsenti
snotf r
ee,t
heagreementisvoidableatt heopti
onofthe
part
ywhoseconsentwasnotfree.

COERCI
ON

Sect
ion15def i
nesCoercionasfol
lows:“Commit
t i
ngorthreat
eningt ocommit,any
actf
orbiddenbytheIndi
anPenalCode,orunl
awf
ul det
aini
ngorthreateningt
odetain,
anyproperty
,totheprej
udiceofanypersonwhateverwit
ht heintenti
onofcausing
anypersontoenteri
ntoanagreement.
”

Thuscoerci
onmeanscompell
i
ngaper sontoenterintoacont
ractbycommit
ti
ngor
thr
eat
eningtocommitanunl
awfuldet
aini
ngorthreateni
ngtodetai
nthepr
opert
yof
anyper
son.

Theessent
ial
element
sofcoer
cionar
easunder
:

1.Commi tt
ingorthreateni
ngt ocommitanyactfor
biddenbytheIndi
anPenal
Code:Ifaper soncommi t
sanactt othr
eatenstocommi tanactwhi
chis
for
biddenbytheIndianpenalCode,
1860heapplyi
ngcoerci
on.

CaseLaw-Ranganay
akammaVs.Al
warSet
ti1889

2.Unl
awfuldetaini
ngorthr
eateni
ngt
odet ai
nanypropert
y:I
fapersonunl
awf
ull
y
det
ainsorthreat
enstodetai
nanypropert
yheisapply
ingcoer
cion.

3.Theactofcoerci
onmaybedi rectedatanypersonandnotnecessar
il
yatt he
otherpart
ytot
heagreement:Theactofcoerci
onmaybedi r
ectedagainstany
person,andnotnecessar
il
yagainsttheotherpart
ytothecont r
act.Itmay
proceedevenf
rom astr
angertothecontr
act.

4.Theactofcoer
cionmustbedonewitht
heobj
ectofi
nduct
ingorcompel
l
ing
anyper
sontoenteri
ntoanagr
eement
.

ConsequencesofCoer
cion

Whenanagr
eementi
smadeundercoer
cion,t
heconsenti
snotf
ree.Hence,i
tis
v
oidabl
eatt
heopt
ionoft
hepar
tywhoseconsentwasnotf
ree.

Dur
ess

UnderEngli
shLawf orcoerci
onasimil
artermisusedwhichiscal l
edDuress.Dur ess
meanst hr
eattotheper sonofanot
herwit
ht heobj
ectofcompel l
inghimtoent erinto
an agreement.Dur ess isli
mit
ed tothreattot he per
son(body),while coercion
i
ncludesthreatt
opr oper
tyandpersonboth.Thusthr
eattopr opertyorgoodsdoes
notamountt oduress.

UNDUEI
NFLUENCE

UndueI nfl
uenceimpliesunfai
randimproperconductorpressur
eont hemindoft
he
otherpar t
y so thathe ent ersinto an agreementwhi ch i
s notf ai
rto hi
m.
Consequent l
ythepartyonwhom unduei nf
luencei
sexerci
sedisindi
rect
lycompel
l
ed
toenterintothatt
ransacti
on.

I
tcr
eat
esament
alormor
alf
earasagai
nstphy
sicalf
ear
,cr
eat
edbycoer
cion.

Sect
ion16(1)defi
nesUndueI nfl
uenceasfol
lows:‘
Acontracti
ssaidtobeinduced
byundueinfl
uencewherether el
ati
onssubsi
sti
ngbetweenthepart
iesar
esuchthat
oneofthepar t
iesisinaposi ti
ontodominatethewil
loftheotherandusesthat
posi
ti
ontoobtainunfai
radvantageovert
heother
.’

Unduei
nfl
uencehast
hef
oll
owi
ngchar
act
eri
sti
cs:

i
. Rel
ati
onsbetweenpart
iesaresucht
hatonepar
tyi
sinaposi
ti
ont
o
dominat
ethewi
lloft
heother

i
i
. Part
ydomi
nat
ingt
hewi
l
lusest
hatposi
ti
ont
oobt
ainanunf
airadv
ant
age
overt
heot
her

Sect
ion16(
2)pr
ovi
dest
hataper
soni
sdeemedt
obei
nposi
ti
ont
odomi
nat
ethewi
l
l
ofanot
her:

a. Wher
ehehol
dsr
eal
andappar
entaut
hor
it
yov
ert
heot
her

b. Where he stands inaf i

duci
aryrelat
ion tothe ot
her.Itimplies a
rel
ati
onshi
pofmut ualt
rustandconf
idence.Eg.Doct
orandpat
ient
;lawyer
andcli
entetc

ConsequencesofUndueI
nfluence:I
fanagreementisi
nducedbyundueinfl
uenceit
i
svoidabl
eattheopti
onofthepartywhoseconsentwasi
nducedbyundueinfl
uence.

BurdenofProof:I
ncaseswher ether
ei sapresumpti
onofunduei nfl
uencethe
burdenofprovi
ngthatthepersonwhowasi nt heposi
ti
ont odominat
et hewil
l
another
,di
dnotusehi sposi
ti
ont oobtai
nanunf ai
radvant
age,wi
llli
eupont he
per
sonwhowasi
naposi
ti
ont
odomi
nat
ethewi
l
loft
heot
her

MI
SREPRESENTATI
ON

Misrepresentat
ionisanincor
rectstat
ementoff
actmadeinnocent
lyi
.e.wi
thoutany
i
ntent i
ont odecei
vetheotherpart
y.Apart
ymakesastatementwhichisnotcorr
ect
butt hepar t
ymaki ngthestatementdoesnotknow thatitiswrongorhonest l
y
bel
iev esthati
tiscorr
ect
.

Accor
dingt
osect
ion18Mi
srepr
esent
ati
onmeansandi
ncl
udes:

a.Byposi
ti
vestat
ement:Whenaper sonmakesaposi
ti
verepsentat
ionwi
thout
anyr
easonabl
ebasi
sorgr oundhonestlybel
i
evi
ngi
ttobetruethoughi
tisnot
tr
ue,
heismakingamisrepresent
ation.

b.Bybreachofduty:Whenapersoncommit
sabreachofdutywhi
chgi
veshi
m
anadv ant
agebymi sleadi
nganot
hert
ohi sdi
sadvant
age,heismaki
nga
misr
epresent
ati
on.

c.Whenaper soninducesanot
herperson,ev
eni
nnocent
lytomakeamist
ake
r
egardi
ng t he subject
-mat
ter of the agr
eement, he i
s maki
ng a
misr
epresent
ati
on.

Casel
aw–Oceani
cSt
eam nav
igat
ionVs.Soonder
das1989

Essent
ial
sofMi
srepr
esent
ati
on

1.Ther
emustbear
epr
esent
ati
onoromi
ssi
onofamat
eri
alf
act
.

2.Therepr
esentat
ionoromissi
onofdutymustbemadewi
thav
iewt
oinduci
ng
theot
herpart
ytoenteri
ntocont
ract

3.Therepr
esentat
ionoromi
ssi
onofdut
ymusthav
einducedt
hepar
tyt
oent
er
i
ntocont
ract.

4.Therepr
esent
ati
onmustbewr ongbutt
hepar
tymaki
ngt
her
epr
esent
ati
on
shoul
dhonest
lybel
i
evet
hati
tistrue.

ConsequencesofMi
srepr
esent
ati
on

1.Theaggr
iev
edpar
tymayr
esci
nd/
avoi
dthecont
ract
.

2.Theaggr
ievedpar
tymayacceptt
hecont
ractbuti
nsi
stthatheshal
lbeplaced
i
ntheposit
ioni
nwhichhewouldhav
ebeenifther
epresent
ati
onbeentr
ue.

3.Wheretheaggri
evedpartyhadthemeanstodi
scov
ert
het
rut
hwi
thor
dinar
y
di
l
igence,
thecontr
actcannotbeavoi
ded.
FRAUD

Fr
audi
sami
srepr
esent
ati
onmadewi
thani
ntent
iont
odecei
veorcheat
.

Secti
on17definesfr
audasfoll
ows,‘
Fraudmeansandincl
udesanyofthef
oll
owi ng
actscommitt
edbyapar tyt
oacont r
act(orwit
hhisconni
vance,orhi
sagent)with
i
ntenti
ontodeceiveanot
herpart
ytheret
o(orhi
sagent
)orinducehimtoenterinto
thecontr
act
.’

i
. Thesuggest
ionthatafacti
str
uewheni
tisnott
ruebyaper
sonwhodoes
notbel
i
eveittobetrue.

i
i
. Theact
iveconceal
mentoff
actbyaper
sonhav
ingknowl
edgeorbel
i
efof
thef
act
.

i
i
i. Apr
omi
semadewi
thoutanyi
ntent
iont
oper
for
mit
.

i
v. Anyot
heractf
it
tedt
odecei
ve

Essent
ial
sofFr
aud

1.Ther
emustbeaf
alser
epr
esent
ati
onoff
act
.

2.Therepr
esent
ati
onmusthavebeenmadebyt
hepar
tyhi
msel
forwi
thhi
s
knowl
edgeorbyhisagent

3.The repr
esentat
ion musthav e been made knowi
ngl
ythati
tisf
alse or
car
elessl
ywithoutascer
tai
ningt
het r
uth.

4.Therepresent
ati
onmusthav
ebeenmadewi
thani
ntent
iont
odecei
veandi
t
act
uall
ydeceive.

5.Thepar
tycompl
aini
ngoff
raudmusthav
esuf
fer
eddamagesduet
ofr
aud.

Whet
herSi
l
enceAmount
stoFr
aud

Explanati
ont osec17makesi tcl
eart hatmeresil
enceastothef act
sli
kelytoaffect
the will
i
ngness ofa per son to enterinto a contr
actis notf r
aud unless the
cir
cumst ancesofthecasearesucht hatregar
dbei nghadtothem iti
st hedutyof
thepersonkeepingsi
lencetospeak, orunl
esssil
enceisequi
valenttospeech.

1.Meresil
encei
snotf
raud-Aper
soni
snotboundt
odi
scl
oset
hedef
ect
sofhi
s
ar
ti
cles.

2.Si
l
encei
sfr
audi
fther
eisadut
ytospeak.

3.Si
lencei
sfraudifsi
lencei
sequi
val
enttospeech.Eg.Bsay
stoA,‘ I
fyoudo
notdenyi
t.Ishal
lassumethatt
hehorsei
ssound.’Asaysnot
hing.HereA’
s
 si
l
encei
sequi
val
entt
ospeechandassuchi
tisaf
raud.

ConsequencesofFr
aud

Thepar
tywhoseconsentwasobt
ainedbyf
raudhast
hef
oll
owi
ngr
ight
s:

i
. Aggr
iev
edpar
tycanav
oidt
hecont
ract
.

i
i
. Hemayal
socl
aim damages.

i
i
i. Hemayi nsteadofav
oidi
ngt
heagreementmayi nsistt
hatthecontr
act
shal
lbeperf
ormedandmaycl
aimt
hediff
erenceorlossduet
of r
aud.

MI
STAKE

Mistake means erroneous bel

iefconcer ni
ng some f act
.Par t
ies ent
eri
ng into
contract
smustnotbeunderanyer r
orandt heyshouldagreeont hesamet hi
ngi n
thesamesensei .e.part
iesshouldbead-idem.Partiestotheagreementmustgi ve
thei
rgenuineconsentt othecont r
act.Theparti
esar esaidtoconsentwhent hey
agreeupont hesamet hingint hesamesense.I ft heydo notagreeupont he
agreementinthesamesense, t
herewillbenocontract.

Hence,t
her
eisnoi
denti
tyofmi
ndont
hesubj
ect
-mat
teroft
heagr
eement
.Ther
efor
e
t
hereisnosal
eint
hiscase.

Mi
stakemaybeoft
wot
ypes:

a.Mi
stakeofl
aw

b.Mi
stakeoff
act

Mi
stakeofl
aw:

Mi
stakeofl
awmaybeoft
hreet
ypes:

1.Mi
stakeofl
awoft
hecount
ry

2.Mi
stakeoff
orei
gnl
aw

1Mi
stakeoflawoft
hecount
ry-I
gnor
anceoflawi
snoexcuse.Ev
eryoneissupposed
t
oknowtheland,
hencei
tdoesnotgi
vether
ightt
othepar
ti
estoavoidthecontr
act.

2Mistakeoff
orei
gnlaw-Mi
stakeofforei
gni
sexcusableasoneisnotexpect
edto
knowthelawofadif
fer
entcount
ry.I
tistr
eat
edasami stakeoff
actandpar
ti
escan
avoi
dthecont
ract
.

Mi
stakeofFact

Mi
stakeoff
actmaybeoft
wot
ypes:
 1.Bi
l
ater
alMi
stake

2.Uni
l
ater
alMi
stake

1Bi
l
ater
alMi
stake:

AsperSec20,whereboththeparti
estoanagr
eementar
eunderami
stakeast
oa
mat
teroff
actessent
ial
totheagreement