FREE CONSENT

According to sec (13) of the Indian contract act defines ‘consent’ as “two or more persons are said to
consent when they agree upon the same thing in the same sense”.
Inorder to create a valid contract, there should be perfect identity of mind, that is, consensus ad
idem between the contracting parties regarding the subject matter of the contract.

MEANING OF FREE CONSENT

The parties to a contract should have identity of mind or consensus ad idem. the word “free
consent” is defined section 14 of the contract act as follows-

Consent is said to be free when it is not caused by

1. Coercion (sec.15)
2. Undue influence (sec.16)
3. Fraud (sec.17)
4. Misrepresentation (sec.18)
5. Mistake, subject to the provision of sec.20,21,22

a. Coercion (sec.15)
Coercion means compelling or forcing a person to enter into a contract under a pressure or threat.
Section 15 of the Indian contract act defines coercion as “the 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 whatsoever, with the intention of causing any person to enter
into an agreement”.
Example: X beats Y and compels him to sell his car for Rs. 50000. Here Y’s consent has been obtained
by coercion because beating someone is an offense under the Indian penal code.

ESSENTIAL CHARACTERISTICS OF COERCION

a) The committing or threatening to commit any act forbidden by Indian penal code: when
the consent of a person is obtained by committing any act which is forbidden by the Indian
penal code, the consent is said to be obtained by coercion.
b) The unlawful detaining or threatening to detain of any property: if a person unlawfully
detains the property of another person and forces him to enter into a contract, the consent
is said to be induced by coercion.
c) It must be uttered with the intention of causing the other party to enter into an
agreement.
d) Coercion can be applied either by a party to the contract or even by a stranger
e) The place of action is immaterial.

Effect of coercion
According to section 19, ‘when the consent of a party to an agreement is obtained by coercion, the
contract, becomes voidable at the option of the party. i.e, such party can put an end to the contract i

According to section 72, “a person to whom money has been paid or anything has delivered under
coercion, must repay or return it”.

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DURESS
• Equivalent term under English law
• It involves actual or threatened violence over the person of other with a view to obtaining
his consent to the agreement.

b. Undue influence (sec.16)

When a party enters into a contract under any kind of mental pressure, unfair influence or
persuasion by the superior party, the undue influence is employed.

Sec 16(1) “A contract is said to be induced by undue influence, where the relation 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”.

Persons in dominant position

As per sec.16(2), a person is deemed to be in a position to dominate the will of another where-

I. He Hold real or apparent authority over the other

Example: the relationship between manager and worker, principal and teacher
II. He stands in a fiduciary relation to the other
Example- the relationship between parent and child, doctor and patient
III. 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.

Effect of undue influence :- voidable at the option of the party whose consent was so
obtained.

Conditions under which undue influence is suspected

a) Inadequacy of consideration
b) Fiduciary relationship between the parties
c) Inequalities between the parties as regards as age, intelligence, social status
d) Pardanashin women
e) Un conscionable bargains

Contract with Pardanashin Women

➢ A Pardanashin Women is one who observe complete seclusion (or parda) from the members
of society in general (She is not allowed to mix up with outsiders)
➢ Any person who enters into contract with a pardanashin women has to prove that no undue
influence was exercised in obtaining her consent.
➢ He has to satisfy the court that terms and conditions of the contract have ben explained to
her and they were understood properly by the women.

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DIFFERENCE BETWEEN COERCION AND UNDUE INFLUENCE

• Coercion implies the use of physical force or threat to cause consent, while undue influences
involve use of moral or mental pressure to cause consent.
• Coercion involves a criminal act, while there is no criminal act in undue influence.
• In coercion, the consent of aggrieved party is given under threat wherein undue influence
the consent of aggrieved party is obtained by misusing the dominant position.
• In coercion, the threat may come from a third party who is a stranger to the contract. While
on the other hand, the undue influence must be exercised by or against a person who is
party to the contract.
• In case of coercion, relationship between the parties to the contract is not necessary, where
as in case of undue influence some sort of relationship is generally exist between the two
parties.

c. Fraud (sec.17)
➢ A wrong representation is made by a party with the intention to deceive the other party or
to cause him to enter into a contract.
➢ According to section 17, “fraud means and includes any of the following acts committed by a
party to a contract or with his connivance or by his agent, with intent to deceive another
party thereto or his agent, or to induce him to enter into the contract”.
➢ It includes any of the following act-
i. The suggestions, as to a fact which is not true, by one who does not believe it to be
true
ii. The active concealment of a fact by one having knowledge or belief of that fact
iii. A promise made without intention of performing it
iv. Any other fact fitted to deceive
v. Any such act or omission as the law specifically declared to be fraudulent

Elements Of Fraud
a. The fraudulent act must have been committed by a party to the contract
Fraudulent shouldn’t be committed by a stranger

b. There must be a representation or suggestion or assertion of a fact which must be false

Example -X while selling his car to Y says that it is of the latest model and brand new
knowingly fully well that it is a used car of old medal. His statement amounted to fraud.

c. There must be active or wilful concealment of a fact

When the party takes some positive steps to prevent an information from reaching the
other party is called “Active concealment”.

d. Promise made without intention of performing it

e. An act or representation must be done or made with an intention to deceive other party

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 f. If an act or omission has specifically been declared by law to be fraudulent, it amounted to
fraud

g. The representation must relate to a fact – mere expression of opinion, imagination, guess
work hear say or of intention does not constitute fraud

h. The other party must have deceived – mere attempt to deceive is not fraud

i. The party acting on the representation must have suffered some loss- there is no fraud
there is no damage

Mere silence is not a fraud

according to sec. 17, “mere silence as to facts likely to affect the willingness of a person to
enter into a contract is not fraud”.
Example- A sells by auction to B a horse which A knows to be unsound. A says nothing to B
about the horse’s unsoundness. This is not fraud by A.

Exceptions to the general rule mere silence is not a fraud

i. Where circumstances create a duty on the part of the person keeping silence to
speak. The duty to speak arises in the following circumstances:
a. Contracts of ubarrimae fidei (utmost good faith)- in this case the law
imposes upon parties the duty of making a true and a full disclosure of all
material fact.
b. Fiduciary relationship – where one party reposes trust and confidence in
other party, such other party must to reveal the truth.
ii. Where silence is equivalent to speech
iii. Change of circumstances

Effects of fraud
If the consent to an agreement is caused by fraud, the contract is voidable at the option of the party,
whose consent was so caused. In case of fraud, the aggrieved party has the following remedies-

a. He can cancel the contract within a reasonable time

b. He can sue for damage
c. He can insist on specific performance of the contract on the condition that he shall be put in
position in which he would have been if the representation made had been true.

d. Misrepresentation (sec.18)

➢ It is a misstatement of material facts.

➢ The party making untrue statement believes that the statement is true, but in reality,
statement turns to be incorrect. It also includes non- disclosure of material facts without any
intention to deceive the other party.

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Essentials of misrepresentation
a) It should be made innocently, honestly believing to be true
b) Facts, not mere opinion or here say
c) Must be untrue
d) Made with an intention to induced to other party to enter into a contract.

Effects of misrepresentation – when consent of the party is caused by the misrepresentation

made by another party, the contract is voidable at the option of the aggrieved party whose consent
was caused by misrepresentation. He has the right to may avoid or rescind the contract.

Difference between misrepresentation and fraud

i. Intention
Misrepresentation – There is no intention to deceive
Fraud -there is an intention to deceive
ii. Belief
Misrepresentation – The person making the wrong statement believes to be true
Fraud – Does not believe it to be true
iii. Effect of consequences
Misrepresentation – The aggrieved party can rescind the contract but cannot claim
damages.
Fraud – The aggrieved party can rescind the contract and, also he can claim
damages.
iv. Discovery of truth
Misrepresentation – The aggrieved party cannot avoid the contract, if it could
discover the truth with ordinary diligence.
Fraud – The contract is voidable at the option of the aggrieved party even though it
had the means of discovering the truth by ordinary diligence.
v. Knowledge
Misrepresentation – The wrong statement is made without the knowledge of the
fact.
Fraud – The person making the representation have full knowledge that it is not true.

e. Mistake
➢ A wrong belief concerning something
➢ If an agreement made under a mistake, it means there is no consent – no legal effect
➢ The effect of mistake is to make a contract invalid.

Classification of mistake

A. Mistake of law
1. Mistake of Indian law – A contract is not voidable if it is caused by a mistake concerning
any law in force in India.
2. Mistake of foreign law – Mistake of fact, contract will be void.

B. Mistake of facts

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 Mistake relating to terms and conditions or any fact essential to the agreement.
1. Bilateral mistake
According to sec.20 “where both the parties to an agreement are under a mistake as to a
matter of fact essential to the agreement, the agreement is void.”
Hence the following conditions have to be fulfilled for the application of sec.20 –
▪ The mistake must be mutual
▪ Mistake must be of fact and not of law
▪ Mistake must relate to a fact which must be essential to the agreement

TYPES OF BILATERAL MISTAKE

1) Mistake as to the existence of the subject matter – if both the parties believe the subject
matter of the contract to be in existence, which in fact at the time of the contract is non-
existent, the contract is void.
2) Mistake as to the identity of the subject matter – it usually arises where one party intends
to deal in one thing and the other intends to deal in other.
3) Mistake as to the quality of the subject matter – if subject matter is something essentially
different from what the parties thought it to be, the agreement is void.
4) Mistake as to the quantity of the subject matter
5) Mistake as to the price of the subject matter
6) Mistake regarding the title of the subject matter
7) Mistake as to the possibility of performing the contract – where the parties to an
agreement believe that the agreement is capable of performance, while in fact it is not so,
the agreement is treated as void.
The impossibility may be:
• Physical impossibility
• Legal impossibility

2. Unilateral mistake
➢ A situation where only one party under a mistake
➢ “A contract is not voidable merely because it was caused by one of the parties to it being
under a mistake regarding a matter of fact”
➢ In the following cases even though the mistake is unilateral, the agreement would be void.
a) Mistake as to the identity of the person contracted with
b) Mistake as to the nature of the contract – a blind person signing a document which is
read over to him wrongly will not be bound by it.

Thank you …