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Unit:- Second
Free Consent, Consent by Coercion, Undue Influence, Fraud, misrepresentation and
mistake (Section 14-22), Legality of object and consideration (section 23-24), Void
Agreements (Section 25-30), Contingent Contracts (Section 31-36)
Leading Case: Mohori Bibee Vs. Dharmodar Ghose (1903) 30 L.A. 114
Overview from the Indian Contract Act, 1872:
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Free Consent (Section 14):
Consent is said to be free when it is not caused by:
1. Coercion (Section 15):
Committing or threatening to commit any act forbidden by law, or unlawful detention
of property to obtain consent.
Example: Threatening someone to sign a contract under the fear of harm.
Case Law: Chikkam Ammiraju v. Chikkam Seshamma (1911)
2. Undue Influence (Section 16):
A person in a dominant position uses their influence to obtain an unfair advantage.
Example: A doctor persuading a patient to make an unfair agreement.
Case Law: Raghunath Prasad v. Sarju Prasad (1924)
3. Fraud (Section 17):
Intentionally deceiving another party to induce them to enter into a contract.
Example: Selling a fake product claiming it to be genuine.
Case Law: Derry v. Peek (1889)
4. Misrepresentation (Section 18):
Making an innocent but false statement to induce another party to enter into a
contract.
Example: Providing incorrect data due to ignorance.
Case Law: Raffles v. Wichelhaus (1864)
5. Mistake (Section 20-22):
Mistake of Fact: Both parties are mistaken about an essential fact.
Mistake of Law: Ignorance of the law is not excusable.
Case Law: Bell v. Lever Brothers Ltd. (1932)
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Legality of Object and Consideration (Section 23-24):
Object or Consideration is unlawful if:
1. It is forbidden by law.
2. It defeats the provisions of any law.
3. It is fraudulent.
4. It involves injury to a person or property.
5. It is immoral or opposed to public policy.
Case Law: Gherulal Parakh v. Mahadeodas Maiya (1959)
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Void Agreements (Section 25-30):
1. Agreements Without Consideration (Section 25): Void except under certain
conditions (e.g., natural love and affection, compensation for past services).
2. Agreements in Restraint of Marriage (Section 26): Void.
3. Agreements in Restraint of Trade (Section 27): Void except reasonable
restrictions.
Case Law: Madhub Chander v. Rajcoomar (1874)
4. Agreements in Restraint of Legal Proceedings (Section 28): Void.
5. Uncertain Agreements (Section 29): Void.
6. Wagering Agreements (Section 30): Void
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Contingent Contracts (Section 31-36):
A contract dependent on the occurrence or non-occurrence of a future uncertain
event.
Example: Insurance contracts.
Case Law: Frost v. Knight (1872)
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Leading Case: Mohori Bibee v. Dharmodas Ghose (1903)
Facts: Dharmodas Ghose, a minor, mortgaged his property to Mohori Bibee. Later, he
sued to void the mortgage.
Judgment: A contract with a minor is void-ab-initio (from the beginning).
Principle: A person incapable of contracting (e.g., a minor) cannot create a valid
contract.
This case serves as a landmark judgment emphasizing the importance of capacity in
contract law.
