Free Consent Meaning Types Fraud Misrepresentation Etc...

1. FREE CONSENT
PARTICIPANTS:-
VANSHIKA MISHRA BAP/22/244
DIYA LUTHRA BAP/22/253
PRIYA VERMA BAP/22/254
HARSHITA GUPTA BAP/22/256

2. CONTENTS
• Introduction
• Consent and Free Consent: Introduction
• Factors affecting Free Consent
• Coercion
• Undue Influence
• Misrepresentation
• Fraud
• Mistake

3. INTRODUCTION
• According to the Section 10 of the INDIAN
CONTRACT ACT, 1872 lays down that “all
agreements are contracts if they are made by the
free consent of the parties".
• Thus, for the enforceability of an agreement not
only consent of the parties should be there but it
should also be free one.

4. WHAT IS CONSENT?
 Agreeing to the same thing
in the same sense
 Meeting of the minds
 ‘Consensus ad idem’

5. FREE CONSENT
Section 14, 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 provisions of Secs 20,21 and 22
When consent to an agreement is caused by any one of the first four factors mentioned in the
definition of free consent, there is 'no free consent' and the contract is voidable at the option
of the party whose consent is so caused (Secs 19 and 19A).

6. FACTORS AFFECTING FREE
CONSENT
1. Coercion, section-15
2. Undue Influence, section-16
3. Fraud, section-17
4. Misrepresentation, section-18
5. Mistake, section-20,21 and 22

7. COERCION
• The term coercion has been defined in
section 15 of the Act as “Coercion” is
the committing or threatening to
commit, any act 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.

8. FEATURES OF COERCION
• Committing or threatening to commit any act forbidden by Indian Panel Code.
• The unlawful detaining of property or threatening to detain any property.
• . Place of coercion.
• Coercion may be from the party to the agreement or a stranger.
• Coercion may be directed at a party to the agreement or a stranger.
• Intention of the party.
• Threat to commit suicide.
• Threat to file a suit on a false charge amounts to coercion.

9. EFFECTS OF COERCION
• Contract becomes voidable.
• Principle of equitable restitution applies in the following two cases:
• a. Section 64 provides that if the aggrieved party opts to rescind(avoid) the
voidable contract he must restore the benefits received by him to the person
from whom they were received.
• b. Section 72 lays down that a person to whom anything has been delivered
or money paid under coercion must return or repay it.
• Valid contract

10. UNDUE INFLUENCE
• Undue influence is mental, moral or physical domination that deprives a person of
independent judgment and substitutes another person's objectives in place of his or
her own.
• By Halsbury "Undue influence is the unconscientious use by one person of power
possessed by him over another in order to induce the other party to enter into a
contract".
• Sec 16(1) defines undue influence as follows: "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 he uses that
position to obtain an unfair advantage over the other".

11. Sec 16(2) provides that when a person is deemed to be in a position to
dominate the will of another:
a. he has apparent real authority over another e.g. master and servant, police
officer and accused
b. he stands in fiduciary relation to the other e.g. doctor and patient, father and
son, guru and disciple
c. he makes contract with mentally distressed person e.g. old illiterate persons
d. he makes contract with pardanashin women e.g women living in seclusion

12. • Wherever there is presumption of undue influence, the burden of
rebutting the presumption lies on guilty party. He has to prove that
price was adequate, there was full disclosure of facts to other party
and that other party's consent was free
• A contract caused by undue influence is voidable at the option of
the aggrieved party. Such party has the right to affirm the contract
or repudiate the contract. In case the party decides to rescind the
contract, it may have to restore back benefits received from other
party wholly or partly as per the directions of court (19A).

13. MISREPRENSTATION
• A statement of fact which one party makes in the course of negotiation
with a view to inducing the other party to enter into a contract is known as
misrepresentation. It must relate to some fact which is material to the
contract. It may be expressed by words spoken or written or implied from
the acts and conduct of the parties. A representation when wrongly made
either innocently or intentionally is a misrepresentation. When it is made
innocently or unintentionally it is misrepresentation and when made
intentionally or willfully it is fraud.

14. Misrepresentation has been defined in section 18 of the Act as under:
“Misrepresentation” means and includes—
(1) The positive assertion, in a manner not warranted by the information of the person
making it, of
that which is not true, though he believes it to be true;
(2) Any breach of duty which, without an intent to deceive, gains an advantage to the
person
committing it, or any one claiming under him, by misleading another to his prejudice
or to the
prejudice of anyone claiming under him ;
(3) Causing, however innocently, a party to an agreement to make a mistake as to the
substance
of the thing which is the subject of the agreement

15. CONSTITUENTS AND ELEMENTS O
MISREPRESENTATION
CONSTITUENTS:
i. Positive unwarranted Assertion
ii. Breach of duty
iii. Causing mistake about the subject matter
ELEMENTS:
i. It must have been made either by the party to the contract or his agent. False representation made by a stranger will not
invalidate the contract.
ii. False statement must relate to the facts material to the contract. In other words, expression of opinion or intention shall not
constitute misrepresentation.
111. It must be such which the party making the assertion believes it to be true although the party does not have sufficient
ground for its belief.

16. EFFECT OF MISREPRESENTATION
In case of misrepresentation the following
remedies are available to the aggrieved party:
i. He may rescind the contract;
ii. He may insist that the contract shall be
performed and he shall be put in the position
in which he would have been if the
representation made had been true.

17. FRAUD
• Fraud is an intentional misrepresentation of material existing facts made by one
person to another with knowledge of its falsity and for the purpose of inducing
the other person to enter into a contract.
• Fraud is a false statement made knowingly or without belief in its truth, or
recklessly careless whether it be true or false.
• Acc to Sec 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, or with intent to
deceive another party there to or his agent, or to induce him to enter into the
contract.

18. • . The suggestion, as a fact of that which is not true, by one who does not
believe it to be true.
• 2. The active concealment of a fact by one having knowledge or belief of the
fact.
• 3. A promise made without intention of performing it.
• 4. Any other act filled to deceive.
• 5. Any such act or omission as the law declares to be fraudulent.

19. ELEMENTS AND EFFECTS(SEC19) OF
FRAUD
ELEMENTS:
i. The act constituting fraud is committed by the party to the contract.
ii. The fraud must relate to any of the acts given under Sec 17.
iii. The fraud is committed upon the other party to the contract.
EFFECT (SEC 19):
1. He may rescind or set aside the contract.
ii. He may ask for restitution and insist on performance
iii. He may sue for damages, if any.
Exception to Sec 19, A party cannot avoid the contract if his consent was caused by silence
constituting fraud and he had the means of discovering the truth with ordinary diligence.

20. SILENCE DOES NOT CONSTITUTE
FRAUD
Silence does not constitute fraud as per explanation to Sec 17. Silence will
constitute fraud in the following cases:
i. Duty to speak
ii. Silence equivalent to speech
iii. Half truth
iv. Change of circumstances

21. MISTAKE
• Mistake means an erroneous belief about something. It has not been defined
in the Indian Contract Act.
• Mistake can be –
(A) Mistake of law, or
(B) Mistake of fact

22. TYPES AND EFFECTS OF MISTAKE