FREE CONSENT

REQUIREMENTS OF
“ FREE CONSENT”

There should
be consent

The consent
must be
FREE
 WHAT IS CONSENT

Section 13 defines …

“ Two or more persons are said to consent when

they agree upon the same thing in the same sense”

i.e. Consensus- Ad- idem

 Effect of absence of consent

When there is no consent at all, the agreement is void ab-initio,

i.e. it is not enforceable.

Free consent is one of the essential elements of a valid contract.

Sec 14-Consent is said to be free when it is not caused by coercion,

undue influence, fraud, misrepresentation or mistake.

When there is consent but it is not free, the contract is usually

voidable at the option of the party whose consent was so caused.
FREE CONSENT

Section 14, FREE CONSENT:

Undue – influence
Misrepresentation
Mistake
Coercion
Fraud( sec
( sec
(sec
20,21,22
(section
17)
15) ) 18 )
( sec 16 )
 COERCION

X threaten to kidnap Y’s

son if he does not lend
forcibly compelling a
Rs. 50,000 to Z. Y agrees
person to enter into a
to lend the amount to Z.
contract.
The agreement is
entered under coercion.
 COERCION
Definition

Section 15 defines coercion as follows -

“ Coercion is committing or threatening to commit any

act forbidden by the Indian penal code, or the unlawful
detaining or threatening to detain, any property, to the
prejudice of any person whatever, with the intention
of causing any person to enter into agreement”
• Committing or threatening to commit any act forbidden by Indian
penal code – X threatens to kill Y if the latter does not agree to sell his
diamond ring for Rs. 1500. ( Threat to kill is forbidden by IPC )
6
Case: Ranganayakamma Vs. Alwar Setti
1889

A Hindu girl of 13 years, who had just lost her husband,

was forced to adopt a boy of their choice by her
relatives
Relatives refuses to remove the dead body of her
husband unless she consented to the adoption.
It was held that the adoption was not binding on her
since her consent was obtained by coercion.
Any person who obstructed the dead body from being
removed would be guilty of an offence under section
297 of IPC.
CONSEQUENCES OR EFFECT OF COERCION

The contract is voidable at the option of party whose

consent was obtained by coercion.

Any benefit has to restored back whether aggrieved party

or other party.

If the aggrieved party does not opt to set aside the

contract, it works as a valid contract.

Does threat to commit suicide amount to coercion – YES

UNDUE INFLUENCE
Definition and meaning Depiction

Under section 16 of Indian contract Act “A

contract is said to be induced by ‘undue
influence’ where the relations subsiding between
the parties are such that one of the party is in
position to dominate the will of other, and uses
that position to obtain an unfair advantage over
the other”
UNDUE INFLUENCE

The strong mind overpower the

weak mind of a person & induces
him to do which he would not
have done if left to his own
judgment. It is a kind of mental
coercion.
The presence of undue influence
at the time of contract has to be
proved by the party alleging that
undue influence existed.
• Examp::
• “A” an old person appoints “B” as his attendant and “B” is his
nephew as well. “B” demands a share of his property and “A”
agrees to pay him. In this situation, “A”  is under the undue
influence of “B”.
Person is deemed to be in position to
dominate the will of another
Where a person
holds a real or
apparent authority
over the other:-

Income tax Master &

officer & assesee servant

Police officer & Moneylender &

accused borrower
Where a party to a contract is a
person of mental distress – When
a person’s mental capacity is
temporarily or permanently
affected due to advance age or
mental or bodily illness.
eg- medical attendant and
patient
Where a person stands in a fiduciary relation to the other:
- A relationship of trust & confidence.

Guardian and ward, solicitors and client, guru and disciple

Case : Sher singh V. Pirthi singh

A, an illiterate old man of about 90 years, physically infirm and mentally in distress.
His nearest relative B, looked after his daily needs and managed his cultivation.
Under the influence of B, A executed a gift deed of his property.
The court held that A was in distress by reasons of old age and physical and mental illness. B
was in position to dominate his will. Thus, Gift deed was voidable.
CONSEQUENCES OF UNDUE _ INFLUENCES

The agreement becomes voidable at the option

of the aggrieved party.

Aggrieved party may refund the benefit.

If the aggrieved party does not opt to set aside

the contract, it works as a valid contract.
 Burden to prove

- other party has

used the
influence to
Weaker party obtain an unfair
has to prove: advantage

- that other -that the

party was in transaction is
position to unreasonable
dominate
 DIFFERENCE
COERCION UNDUE INFLUENCE

Dominate the will of other

P
h
y
sCa
n
i
cbeT
aCridectha
m
lidof
n
alctisagi
in
sta
c
n
strao
vn
f
gerfh
o
lvefrn
cea
d o
m
ar
stra
a
n
gerc

t
e
r

Certain relationship between the parties

Moral character

Intention to take a unfair advantage

No criminal act is involved

 MIS-REPRESENTATION

(2) any breach of
duty which, without
"(1) the positive
an intent to deceive, (3) causing, however
assertion, in a
gains an advantage innocently, a party to
manner not
of the person an agreement, to
warranted by the
Misrepresentation” committing it, or any make a mistake as to
information of the
means and includes one claiming under the substance of the
person making it, of
him, by misleading thing which is the
that which is not
another to his subject of the
true, though he
prejudice, or to the agreement.
believes it to be true;
prejudice of any one
claiming under him;
 • Example :
• A believed engine of his motor-cycle to be in excellent
condition. At the time of sale of this Motor-cycle, A without
getting checked in work shop, told B that motor cycle was in
excellent condition.
• On this statement B bought motor-cycle, whose engine proved
to be defective.
• Here A’s statement is misrepresentation.
• X says to Y who intends to purchase his land that it produces 50 quintals
of wheat per acre. X believes the statement to be true, although he did
not have sufficient grounds for the belief. Later on, it was found that land
produces only 30 quintals of wheat per acre. This is mis-representation.

• A intends to sell his horse to B and says,” my horse is perfectly sound”. A

genuinely believes the horse to be sound, although he does not know
that the horse has fallen ill yesterday. B there upon buys the horse. There
is misrepresentation on part of A.
ESSENTIALS OF MIS -
REPRESENTATION
• Must have been made either by the party or by his
duly authorized agent.
• There should be a representation of facts-not opinion
• Representation is untrue
• The representation induces the other party to enter
into a contract.
• The party making representation does not intend to
deceive the aggrieved party.
CONSEQUENCES OF MIS-
REPRESENTATION

• The contract is voidable at the option of aggrieved

party.
• Can rescind or avoid the contract
• Can accept but if placed in same position if the
representation was true
 FRAUD

When any person makes to

another a statement which
he does not himself believes
INTENTIONAL MIS –
to be true to induce the
REPRESENTATION AMOUNTS
latter to enter into the
TO FRAUD
contract or concealment of
Material Fact, he commits a
fraud.
1. Making a false suggestion

X says to Y that his coat

To constitute fraud is made of pure wool,
there must be making a though he knows that it
false suggestion is untrue. Y purchases
without inquiring the coat believing X’s
whether it is true or statement true. It is a
false fraud by X and contract
is voidable.
2. Active concealment of fact by one
having knowledge or belief of fact

If a person conceals a fact which is material to the contract and it is his duty to
disclose it, it will be a case of fraud.

A, a horse dealer sold a mare to B. A knew that the mare had a cracked hoof, which
he filled up in such a way as to defy detection. The defect was subsequently
discovered by B. The agreement can be avoided by B as his consent was obtained
by fraud.
2. Active concealment of fact by one having
knowledge or belief of fact

If a person conceals a fact which is material to the contract so that the

buyer even after a reasonable examination cannot trace the defects
and it is his duty to disclose it, it will be a case of fraud.

Example-
A, a furniture dealer, conceals the cracks in the furniture sold by him by using some packing
material and polishing it in such a way that the buyer even after reasonable examination cannot
trace the defect, it would amount to fraud
3. A promise made without any intention of performing it.

A man & woman went

through a ceremony of
marriage, the husband
The initial intention not to
having no intention to
perform the promise that is
regard it as a real marriage.
being made is necessary
It was held that the consent
element to constitute fraud.
of wife was obtained by
fraud and marriage was just
a pretence.
WHEN DOES SILENCE AMOUNT TO
FRAUD
• Ordinarily, a mere silence does not amount to fraud.
• A sells, by auction, to B a horse which A knows to be unsound. A
says nothing to B about the horse’s soundness. This is not fraud
by A
• Silence is fraudulent, if it is the duty of person
keeping silence to speak
• Fiduciary relationship
• contracts of insurance
• contracts of marriage
• Contracts of family settlements
 • B says to A- “ If
you do not deny
Where it, I shall assume
that horse is
silence sound.” A says
nothing . Hence
itself is A’s silence is
equivalent equivalent to
speech. If the
to speech horse is unsound
A’s silence is
fraudulent.
CONSEQUENCES OF FRAUD

Voidable

Can insist on
May claim performance if
damages put in same
position.
MISTAKE
Mistake means parties intending to do one thing
have by intentional error done something else. It
is a slip made not be design but by mischance.

TYPES OF MISTAKES :

Mistake of law ( Indian and foreign law), Mistake

of fact:-bilateral and unilateral
Mistakes of Indian Law

Everyone is deemed to be conversant with the law of his

country and hence the maxim “ ignorance of law is no
excuse”.

It does not give parties right to avoid the contract. No relief

can be granted on the ground of mistake of law of the
country.
Mistakes of foreign law

A mistake of foreign law is treated as

mistake of fact, i.e. the contract is void if
both the parties are under a mistake as to
a foreign law because one cannot be
expected to know the law of other
country.
Mistake of fact arises when the parties
enter into a contract without
understanding the terms & conditions of
the contract properly.
Bilateral Mistake

• both parties must be under

Section 20 provides a mistake
that “ where both
parties to an • mistake must relate to the
agreement are under
a mistake as to a fact and not to judgement
matter of fact essential
to the agreement, the
or opinion
agreement is void”. • fact must be essential to the
agreement
Unilateral Mistake

Where only one of the contracting X sold Oats to y by sample and Y,

parties is mistaken as to a matter of thinking that they were old oats,
fact, the mistake is unilateral mistake. purchased them. In fact, the oats
were new. It was held that Y was
bound by the contract.
 HOUSE IS OPEN FOR
QUERIES????
THANKS A LOT FOR
STAY HOME N STAY
YOUR TIME AND
SAFE
PATIENCE.