Free Consent

Course Tittle: Legal Environment of Business

Course Code: BUS361

Submitted To:
Fariha Abedin (FAN )
Senior Lecturer,
Department of Law
East West University
Submitted By:
Tanvir Ahmed Chowdhury
2018-1-10-226
Section: 03
Department of Business Administration

Submitted Date: 09-09-2020

 Free Consent

Meaning of Consent
I have learnt that when two parties enter into a contract they should give their consent. In section
13 of the Contract Act 1872, defines the term 'Consent' as two or more persons are said to
consent when they agree upon the same thing in the same sense.

Concept of Free Consent

For a contract to be valid it is not enough that the parties have given their consent. In section 10
of the Contract Act specifically provides that all agreements are contracts if they are made by the
free consent of the parties. Section 14 of the Act states that Consent is said to be free when it is
not caused by (i) coercion, (ii) undue influence, (iii) fraud, (iv) misrepresentation, (v)
mistake.

1. Coercion (Section 15)

Coercion as performing or threatening any act prohibited by law or unlawful detention or attempting
to detain any property or individual with a view to forcing a person to enter into a contract.
Coercion renders a contract voidable at the aggrieved party’s case.

For example, Joly threatens to hurt Poly if she does not sell her house to Joly for 5 lakh Tk. Here
even if Poly sells the house to Joly, it will not be a valid contract since Poly’s consent was obtained
by coercion.

2. Undue Influence (Section 16)

Undue Influence refers to a situation in which the relations between the two parties are such that
one party is in a position to dominate the other and thus uses that position to influence the other
party and to obtain an unfair advantage. This can also occur when a contract is made with a
person whose mental capacity is affected by age, illness or distress.

For example, Anika sold his gold watch for only 500 Tk to his teacher Shilpa after his teacher
promised him good grades. Here the consent of Anika is not freely given, she was under the
influence of his teacher.
 3. Fraud (Section 17)

Fraud means deceit on the part of one of the parties, when one of the parties deliberately makes false
statements. It intentionally suggests a fact that is not true.

For example. Alex bought a horse from John. John claims the horse can be used on the farm. Turns
out the horse is lame and Alex cannot use him on his farm. Here John knowingly deceived Alex and
this will amount to fraud.

4. Misrepresentation (Section 18)

A statement made which is not true but the person making it or believes it to be true.
Misrepresentation happens when a person signs a contract and then claims damages as a result of
taking advice from the other party

5. Mistake (Section 20,21,22)

A mistake is an erroneous belief that is innocent in nature. It leads to a misunderstanding between

the two parties. Now when talking about a mistake, the law identifies two types of mistakes, namely

i. A Mistake of Law

ii. A Mistake of Fact

Mistake must be bilateral, not unilateral that measures when both parties of a contract are under a
mistake of fact essential to the agreement, such a mistake is what we call a bilateral mistake.

If there is a mistake that occurs the contract is void. But the contract is voidable when the party
whose consent was not free may either announce or withdraw. (Coercion, Fraud, Misrepresentation).