Free consent

introduction
What is free consent
One of the essentials of a valid contract mentioned in Section 10 is that the parties should
enter into the contract with their free consent. According to Section 14, consent is said to
be free when it is not caused by-
1) coercion, as defined in Section 15, or
2) undue influence, as defined in Section 16,
3) Fraud as defined under section 16
4) misrepresentation, as defined in Section 18
5) mistake, subject to the provisions of Sections 20, 21 and 22
When consent to an agreement is caused coercion, undue influence, fraud or
misrepresentation, the by agreement is a contract voidable at the option of the
party whose consent was so caused.' If, however, the consent is caused by
mistake, the agreement is void.
coersion
Section 15 of the Indian Contract Act,1872 states that coercion is committing or
threatening to commit, any act is forbidden by the Indian Penal Code (45 of 1860) 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 an
agreement. Coercion means forcing an individual to enter into a contract. When
intimidation or threats are used under pressure to gain the party’s consent, i.e. it is
not free consent.

Coercion has the effect of making the contract voidable. It implies that at the
discretion of the party whose consent was not free, the contract is voidable. The
aggravated party will, therefore, determine whether to enforce the contract or to
cancel the contract.
In Ranganayakamma v. Alwar Setti, the question was regarding the
validity of an adoption made by a widow aged 13 years. Husband’s body
was not allowed to be removed until the widow had adopted the boy. It
was held that the adoption was obtained through coercing the widow
and so it was not valid consent
In Chikkam Ammiraju v. Chikkam Seshama , the Madras High Court
had to decide whether a threat to commit suicide was coercion. A, a
Hindu, by a threat to commit suicide, induced his wife and son to
execute a release in favour of his A’s brother in respect of certain
properties which they claimed as their own. It was held by a majority
“that a threat to commit suicide comes within the meaning of Section 15
of the Indian Contract Act, 1872 and the release deed was therefore
voidable in nature. Threat to commit suicide was considered as an act
forbidden by the Indian Penal Code, 1860
1) Threat to strike is no coersion

This question arose in the case of Workmen of Appin Tea estate v Industrial
Tribunal. In this case workers demand of bonus was accepted after they
threatened to strike. The question which was placed here was that whether
the decision between Union Workers and Indian Tea association could be
declared void on the grounds of Coercion under section 15 of Indian
Contract act. It was held that such threat does not come under threat to
commit an offence under IPC nor it is detaining or threatening to detain
any property.
2) statutory compulsion is no coercion
When a statute requires a contract to be entered into the consent in such a case is

not deemed to be caused by coercion, In Andhra Sugars Ltd. v. State of A.P., if any

cane grower offered to sell his sugarcane to a factory in a certain zone, the factory
was bound to accept the offer under the Andhra Pradesh Sugarcane (Regulation of
Supply and Purchase) Act, 1961, and accordingly the agreement was entered into. It
was held that in such a case even though there was a legal compulsion for the factory
to make the agreement, the agreement could not be said to be entered into by the
lack of free consent, and there was no coercion either.
Undue influence
Section 16 of the Indian Contract defines Undue Influence. The Section reads as:(1) A contract is said to
be induced by “undue influence” where the relations subsisting between the parties are such that one of
the parties is in a position to dominate the will of the other and uses that position to obtain an unfair
advantage over the other.

(2) In particular and without prejudice to the generality of the foregoing principle, a person is
deemed to be in a position to dominate the will of another-

(a) where he holds a real or apparent authority over the other, or where he stands in a fiduciary
relation to the other; or

(b) where he makes a contract with a person whose mental capacity is temporarily or permanently
affected by reason of age, illness, or mental or bodily distress.

(3) Where a person who is in a position to dominate the will of another, enters into a contract with
him, and the transaction appears, on the face of it or on the evidence adduced, to be
unconscionable, the burden of proving that such contract was not induced by undue influence shall
lie upon the person in a position to dominate the will of the other.
Dominating Position- In this category of undue influence, the circumstance under which the contract was made is taken in the account along with
their relationships. The existence of dominating position along with its use is mandatory to invoke an action. If once dominance is established,
unless any contrary object appears, it is presumed that there was a use in the particular instance

Unfair Advantage- In Ganesh Narayan Nagarkar v. Vishnu Ramchandra Saraf[4], it was stated by the court that, “unfair advantage is the advantage
or enrichment which is obtained through unrighteous or unjust means”. It comes into existence when the bargain favours the person who enjoys
influence and which proves unfair to others.

Real and Apparent Authority- In this type of influence, there is a real authority like a police officer or an employer who uses his dominance for his
enrichment. Apparent authority is pretending real authority without its existence

Fiduciary Relationship- This type of relationship is solely based on the existence of trust between the parties for each other. It is such that one of
the parties naturally reposes its confidence in the other one and with an increase in that confidence gradually, one party starts influencing the
other. This type of relationship usually exists between doctor and patient, lawyer and client, parent and child, teacher and student and beneficiary
of a trust (cestui que trust) etc. An example of such type of case was in Mannu Singh v. Umadat Pande where a guru influenced his disciple to take his
property in gift by promising to secure benefits to him in the next world. The court set the gift aside as it was not formed with free consent.

Affecting Mental Capacity- It is an established law from Inder Singh v. Dayal Singh[7] that, “undue influence arises when one party taking the
advantage of the temporary or permanent advantage of another’s mental condition executes a contract. But, a mere distressed state of mind cannot
amount to undue influence until the defendant has used this opportunity to his advantage.
Under Section 19A of the Contract Act, an agreement induced by undue
influence is voidable at the option of that party whose consent was taken by
influencing him/her. Performance of such agreements may be avoided
absolutely or on prescribing certain terms and conditions.
fraud
Section 17 describes fraud and lists the acts that amount to fraud, which are a false claim, active
concealment, promise without the intention of carrying it out, any other deceptive act, or any act
declared fraudulent. To constitute fraud, the contracting party, or any other individual with his
connivance, or his agent, or to induce him to enter into the agreement, should have performed such
acts.

Fraud implies and involves any of the following acts committed by a contracting party or his connivance
or his agent with the intention of deceiving or inciting another party or his agent to enter into the
agreement.

● The suggestion, as a fact, of that which is not true by one who does not believe it to be true.
● The active concealment of a fact by one having knowledge or belief of the fact.
● A promise made without any intention of performing it.
● Any other act fitted to deceive.
Active concealment
Active concealment is a situation where one party conceals material information related to the contract
despite having a duty to disclose such information. In simpler words, it refers to failure in disclosing
private information. It is more than mere passive concealment, that is to say, it requires an overt act for
concealment. It is crucial to note here that passive concealment referred to above means silence. The
section makes it clear that though mere silence doesn’t amount to fraud, it may constitute fraud under
situations where the party has a duty to speak or where such silence is equivalent to speech.

Promise without intention of performing

What has been contemplated under this clause is that the initial intention of not performing the
promise that is made is a necessary element to constitute fraud Various types of situations that
fall under this clause include – where a person contracts with another without the intent to
perform, only to prevent the other from contracting with some third person; contracting without
the intending to pay the agreed consideration; one party promising the other, something which
he is certain of not being able to accomplish in the given contractual period.