FREE CONSENT

Learning outcome:
To analyse the situations under which the
consent is not free and comprehend its’
effect on validity of a Contract.
Consensus ad idem

Meeting of minds: when two parties to a contract agree

upon the same thing in same sense.
 Consent (Sec 13)
“Two or more persons are said to consent when they agree
upon the same thing in the same sense”.
(consensus ad idem)
When a contract is said to be with free consent?
Consent is said to be caused when it would not have been given but for the existence of

such coercion, undue influence, fraud, misrepresentation or mistake.

When consent is not received by:

• Coercion

• Undue influence

• Fraud

• Misrepresentation

• Mistake
 Free Consent (Sec 14)
“Consent is said to be free, when it is not caused
by
• Coercion
• Undue influence
• Fraud
• Misrepresentation
• Mistake”
Coercion (Sec 15)
Consent without pressure or
compulsion
 Where a person commits an act or threatens
to commit an act forbidden by Indian Penal
Code,1860, including threat to commit
suicide, he is applying coercion

Threat to commit suicide amounts to coercion

Xavier forcibly kidnaps the son of David and asks him to
execute a promissory note of rupees one lakh in his
favour. Now under the threatening David executes a
promissory note in favour of xavier. Is the promissory
note enforceable?
No, such a promissory note cannot be enforced in the court of law as the consent was

not free and was induced by coercion. Thus, the promissory note so signed is voidable

at the option of David, whose consent was taken by threat of killing his son.
 Committing or threatening to commit an act forbidden by
Indian Penal Code, or unlawfully detaining or threatening to
detain any property.

The act constituting coercion, must be directed at a person and

not necessarily at the other party to the agreement.

Essentials
of The act constituting coercion, must have been done or
Coercion threatened with the intention of causing any person to enter
into an agreement.

It is immaterial whether Indian Penal Code is or is not in force in

the place where coercion is employed.
 Aggrieved party can request to set aside the contract.

Request to reject or cancel

Effect of
Coercion
Aggrieved party can also get the contract
enforced on other party and insist upon
its performance.
Accept the contract
David threatens to shoot himself if Bishop does not agree to sell his property to
him at a stated price.
In this case the consent of Bishop is received by coercion and thus voidable at
the option of Baishop.
Suppose X threatens to kill Y, if he does not sell his house for Rs. 50,000. Y sells the house
to X. Does it formulate a valid Contract? Give reasons in support of your answer.
NO, as the consent of Y is not free. Here, coercion has been applied to obtain the assent
of Y. The contract is thus voidable a the option of Y.

If he decides to cancel/ avoid the contract, he may do so. Thus, X will have to return the
house. Y will have to return his Rs. 50,000 to him.
 Problem
A 13 years old girl Carol got widow. She was not
allowed to be part of cremation rituals of her
husband, until she adopted a 2 years old boy in
her in laws family. Decide whether such
adoption to attend cremation of dead husband
is legal?
 Problem
An agent refuses to handover the account
books, bonds etc. of the business to his
successor agent unless the principal gave him a
release of all liabilities during the term of his
agency. The principal does so but later filed a
suit to declare the release deed as cancelled.
Decide can they do so?
Undue influence (Sec 16):
 When one party is in a position to dominate
the will of other party

When a
contract is
induced by One of the party uses its position to obtain
undue an unfair advantage over the other
influence?
 Burden of Proof
Where a person who is in a position to dominate
the will of the another, enters into a contract
with him, the burden of proving that such
contract was not induced by undue influence,
shall be upon the person in a position to
dominate the will of the other.
Nutshell:
Burden lies on the shoulder of the party who
was in a position to dominate the will of the
other party that the contract was not induced by
undue influence.
 If a party holds real or apparent authority over the other or
stands in a fiduciary relation to the other.

Where influential party uses his influence to take the consent

of the other party.

If he makes a contract with a person whose mental capacity is

Presumptions temporarily or permanently affected by reason of age, illness
or mental or bodily distress.
 Undue influence when presumed:

(a) Real or apparent authority

(master-servant, doctor –patient)
b) Fiduciary relationship

solicitor-client
spiritual guru
Effect of Undue Influence :
• Agreement is voidable at the option of the
aggrieved party.
• Court may set aside the case
or
Implement it in the modified form
(e.g bond of Rs.100 signed for Rs.200)
• To return the benefit if contract is set aside
 Problem
Janki, an illiterate woman, executed a deed of
gift in favour of nephew under the impression
that it was deed authorising her nephew to
manage the lands. Evidence adduced that
woman never intended to execute such deed
nor deed read or explained to her. Is the deed
legally binding on janki?
No, the deed was void and inoperative as she
was illiterate and depended on her nephew to
be informed .The, nephew exercised undue
influence by taking advantage of illiteracy of her
aunt.
 Problem
A poor Hindu widow who was in dire need of
money , was forced by money lender to agree to
pay 100% rate of interest.
Basis of Coercion Undue Influence
difference
Definition Committing, or threatening to commit, any act where the relations subsisting
forbidden by the Indian Penal Code or the between the parties are such that
unlawful detaining or threatening to detain, one of the parties is in a position to
any property, to the prejudice of any person dominate the will of the other and
whatever, with the intention of causing any uses that position to obtain an
person to enter into an agreement. unfair advantage over the other.

Nature of force Physical Moral force or mental pressure.

Burden of Proof Party whose consent was so caused.
Effect Rescision of contract- return any benefit
received by aggrieved party
Party who was in a position to
dominate the will of other party.
Court discretion to direct aggrievd
party to restore benefit whether in
whole or part or set aside the
contract with directions for refund
of benefit

Criminal Yes, under Indian Penal Code No

Liability
Misrepresentation (Sec. 18)
 Representation????
A statement of fact which one party makes in the
course of negotiations with a view to inducing the
other party to enter into a contract is
‘representation’.

It can be :
(a) Innocent
(b) Intentional
What is Misrepresentation (Sec 18)?
It is a false statement which the person making
it honestly believes it to be true
OR
Which he doesn’t know to be false

e.g. Unsound mare

Unwarranted
Assertion Breach of Duty

Categorization of
Misrepresentation

Innocent Mistake
Innocent Misrepresentation
 There should be a representation or assertion - mere expression or opinion will not
amount to misrepresentation

Such representation must relate to a matter of fact which has become untrue.

Should be done prior to finalization of transaction to induce other party to enter into
contract.

Essentials of
Misrepresentation Party should have actually acted upon it.

Should have been done by party or his authorized agent

Should be made not with an intention to deceive

Need not to be made directly to other party

 Avoid agreement / set it aside

Effect

Insist on performance
Fraud (Sec 17)
 Fraudulent Acts:

False statement
Deception
[ Sahara scam]

Active concealment Fraudulent omission

Intentional non –
performance [speak Asia
fraud]
Avoid or rescind the contract

May affirm the contract and insist upon

Effects of
the misrepresentation being made good
Fraud

Claim for damages

Representation or assertion
Representation or assertion
must be false
must be of a fact

Intention to deceive

Essentials
elements of
Fraud Fraudulent act must be
committed with knowledge of its
falsity

Fraudulent act must be done by

a party to the contract or his
authorized agent
Fraudulent act must have
deceived the other party
Fraudulent act must be committed with knowledge of its falsity
Fraudulent act must have deceived the other party
Basis of difference Fraud Misrepresentation

Intention Involves intention to decieve the other party. No such intention involved.

Belief If the statement is dishonest, it is a case of fraud. If the statement is honest, even though it was wrong, it will
be considered as misrepresentation.

Rights Rescind contract and can also sue for damages. Rescission only possible remedy.

Defence If from independent sources truth could be recovered but those were not availed, If truth could be discovered with ordinary diligence, the
yet aggrievd party may rescind the contract and/or sue for damages. contract cannot be avoided by aggrieved party.
Mistake (Sec 20-22)
 Mistake is an erroneous
belief concerning
something

Mistake of Law Mistake of fact

Mistake of Fact
 Types of Mistake

Bilateral
Unilateral

• Subject matter
• Possibility of performance
Mistake as to subject matter:
Unilateral Mistake:
 MCQ
Two or more persons are said to consent when
they agree upon the
a) Same thing in the same sense
b) Same thing in the different sense
c) Different thing in the different sense
d) Different thing in the same sense
 MCQ
The consent of a party is not free when it is
caused by
a) Coercion
b) Undue influence
c) Misrepresentation
d) All of these
 MCQ
In cases where both the parties to an agreement
are under a mistake as to the fact essential to
the agreement, the agreement is 
a) Void
b) Voidable
c) Valid
d) Illegal
 MCQ
Shruti sold a bottle to Ankit and told him that it is a
steel flask. Ankit consented for the contract
believing the bottle to be a steel flask. If the bottle
was not a steel flask, it is a case of
a) Fraud if Shruti knew it was not a steel flask.
b) Misrepresentation if Shruti believed it to be a
steel flask
c) Either (a) or (b)
d) None of these
 MCQ
A promised to sell the car in the garage to B. There
were two cars in the Garage – Maruti and Hyundai.
A gave Maruti to B but B said that he agreed for the
Hyundai car.
a) This is a valid contract
b) There is no consent as they did not agree upon
the same thing in the same sense.
c) no free consent
d) None of the above
 MCQ
Aarti threatened Archana that she will kill Archana’s
brother if Archana did not give the tender to Ashu.
Archana gave the tender to Ashu under this fear. This
contract is
a) Void
b) Voidable under section 16 of the Indian Contract Act
c) Voidable under section 15 of the Indian Contract Act
d) Valid
 MCQ
Rohan agreed to sell his vintage car to his boss
for just Rs. 10000 as his boss promised to give
him a due promotion. It is a case of
a) Free Consent
b) Undue Influence
c) Misrepresentation
d) Fraud