A contract is voidable and void in case of undue influence and misrepresentation respectively.

1. CONTRACT- I
FREE CONSENT
BY
PINNY PATHAK

2. SECTION 14= defines free consent – X caused by
C Coercion …… S. 15
U Undue Influence …… S. 16
F Fraud …… S. 17
Mr Misrepresentation …… S. 18
M Mistake Subject to S. 20, 21 & 22
• C U F Mr= Voidable at the option of the parties whose consent was so caused
• M= Void

3. UNDUE INFLUENCE
TOPICS TO BE COVERED UNDER UNDUE INFLUENCE:-
DEFINITION
DIFFERENCE BETWEEN COERCION AND UNDUE INFLUNCE
PRESUMPTION OF UNDUE INFLUNCE
CASE LAWS

4. • Section 16 = Undue Influence
Induced by UI
relations subsisting between parties
one party= position to dominate will of other person
+
uses position to obtain unfair advantage over other
Will be in position to dominate
- Holds real/ apparent authority over the other / is in a fiduciary relation to the other
Contract with person whose mental capacity is temporary / permanently affected –
Reason age, illness, mental / bodily distress
Transaction appears on face of it or on evidence adduced – unconscionable (unfair)

5. • BURDEN OF PROOF= Upon the person in a position to dominate will of the other
• X affected by provisions of Section 111 of the Evidence Act (in good faith)
 ABILITY TO DOMINATE WILL OF ANOTHER
- Person in a superior position prevail upon the other
- Other’s consent obtained to which he would have not consented by but because of
influence exerted upon
- Eg. Spiritual advisor (guru)
- CASE LAW:- Mannu Singh versus Umadat Pandey 1890
Held –gave whole of property - consent obtained by UI – X reasonable man would do so
– here mastery is obtained over mind of victim – result brought by fear, coercion or
domination- calculated to prevent expression of victim's true mind

6. COERCION
• Here physical compulsion of a person-
there is threat to person’s life / limb or
threat of physical beating or
imprisonment
UNDUE INFLUNCE
• Exit without violation / threats
• Existence of a relationship between 2
parties- causes one to place a
confidence in the other which
produces a natural influence over the
one which other abuses for his own
advantage

7. RELATIONS WHICH INVOLVE DOMINATION
When will be able to dominate will of the other?
- Active trust + confidence between parties / not on equal footing
- Influence acquired / abused
- Confidence is reposed & betrayed
CASE LAW:- Willams versus Bayley 1866
Held – Contract Voidable
Real Authority = Police, Magistrate
Apparent Authority = person has no real authority able to approach other with show /
colour of authority
Fiduciary Relation = trust & confidence

8. - very wide one
• Therefore if consent obtained by abusing confidence = voidable
• Obliged to tell the whole truth
 MENTAL DISTRESS
- Mental capacity is temporarily / permanently affected
- Here extreme old age, mental or bodily injury
- Easily persuaded to give consent
 Mere Urgent need of money is no distress need to show sufficient evidence of metal
distress
Statutory compulsion or avoid a prosecution case & perform an act is X compulsion

9. • BURDEN OF PROOF:-
Plaintiff to prove 2 points = other party in dominate position
he actually used his influence to obtain consent
Law= was in dominate position + he must use it- x could have or had

10. PRESUMPTION OF UNDUE INFLUENCE
- Means once shown that the defendant was in a position to dominate will of
plaintiff it will be presumed that he must have used his position to obtain unfair
advantage. Here defendant to show then that Plaintiff gave consent freely.
- 2 situations
1) Unconscionable Bargain, Inequality of Bargaining Power or Economic Duress
- Contract unfair – presume consent obtained by undue influence
CASE LAW:- Wajid Khan versus Raja Ewaz ali Khan 1891

11. 2) Contracts with Pardanashin Woman
- Means woman who is totally secluded from ordinary social
- Burden on other person to prove X undue influence
RESCISSION – Section 19 A
- Consent obtained by UI- voidable
- Can be set aside either absolutely or if received any benefits upon such terms and
conditions as to Court may seem just

12. MISREPRESENTATION

13. MISRESPRESENTATION - Section = 18
• Means misstatement of a fact material to contract
• Means & includes – (inclusive definition)
- Positive assertion- which not true though he believes it to be true
- Breach of duty- X intention to deceive gains an advantage to person committing it
or anyone under him
- Causing party to make a mistake to a thing which is subject of the agreement

14. 1. UNWARRANTED STATEMENT
Here positive assertion is made
That which the person making himself / herself not confident about or
aware of it
And the statement are not true
CASE LAW: Oceanic Steam Navigation Co. Versus Soonderdas Dharamsey 1890
Held- presence of positive assertion

15. • Warranted statement = means information should come from a trustworthy source
not hearsay
- Where representation made becomes a term of contract & it turns out to be untrue-
then- disadvantage party not only avoid contract but also sue for damages for
breach
2. BREACH OF DUTY
- Covers cases of constructive fraud- where there is no intention to deceive but where
circumstances are such as to make the party who derives a benefit from the
transaction equally answerable in effect as if he had been actuated by motives of
fraud or deceit

16. CASE LAW:- Oriental Bank Corporation versus John Fleming 1879
Held- plaintiff placed confidence obliged to disclose it
IMPORTANT- Representation of facts + Accept false statement as true
3. INDUCING MISTAKE ABOUT SUBJECT MATTER
Subject matter- means something which holds certain value or quality
Here makes the other party to make a mistake
Eg. Don’t disclose land mortgaged or tenant occupied it
Dealers are under a duty to disclose defects and disadvantages- Volunteer the truth
when they know it and not make grossly and potentially misleading statement

17. • SUPPRESSION OF FACT
- Falls under (2) + (3) clause
- Basically means misrepresentation also arise when suppression vital facts
- Eg. Girl suffers from fits- suppressed during the marriage
- Material fact= important fact
- X cover statements which are general in nature
- Material – if it would affect the judgment of a reasonable person in deciding
whether to enter into the contract and if so on what terms – eg. Affect price value
or durability

18.  EXPRESSION OF OPINION
- Mere opinion X misrepresentation
- Facts equally well known to both the parties= expression of opinion
- Facts not equally well known to both the parties= not expression of opinion
CHANGE IN CIRCUMSTANCES
- There is often a gap of time between the representation of a fact and the ultimate
conclusion of contract. Any change in the meantime affecting the fact represented
must be brought to knowledge of the other party

19. • Misrepresentation must be cause of the consent- Section 19- X misrepresentation to
cause consent to a thing X render Contract Voidable
• Party cannot complain if have Means of discovering the truth
• Use those means of discovering the truth but does not use them-= X complain of
misrepresentation
• X uses them and relies upon the Statement- can avoid them