1. LAW RELATING TO AGREEMENT
The Indian Contract Act, 1872[1] prescribes the law relating to contracts in India and is the key
act regulating Indian contract law. The Act is based on the principles of English Common Law. It
is applicable to all the states of India. It determines the circumstances in which promises made by
the parties to a contract shall be legally binding. Under Section 2(h), the Indian Contract Act
defines a contract as an agreement which is enforceable by law.
3. Meaning of ‘consent’ and 'Free consent’(secs.13 and 14)
Consent:
It means acquiescence or act of assenting to an offer.”Two or more persons are said to consent when they agree
upon the same thing in the same sense” (sec.13)
Free consent, Consent is said to be free when it is not caused by_
1. Coercion as defined in Sec.15,or
2. Undue influence as defined in Sec.16, or
3. Fraud as defined in Sec.17,or
4. Misrepresentation as defined in Sec.18,or
5. Mistake,subject to thr provisions of Sec.20,21 and 22(Sec.14)
4. EXAMPLE
An illiterate woman executed a deed of gift in favour of her nephew under the impression that she was executing a
deed authorising her nephew to manage her lands.The evidence showed that the women never intended to execute
such deed of gift,nor was dead ever read or explained to her.held, the deed was void and inoperative.
In the above case the consent of the woman is altogether absent.Had she known the true position,she would not
have signed the document.A deed executed by a person in such circumstances is mere nullity. But where there is
consent l, but it is not free,i.e, where it is caused by coercion,undue influence,fraud, misrepresentation,the contract is
voidable at the option of the party whose consent is so caused(Secs.19 and 19 A)
5. EXAMPLE
A is forced to sign a promissory note at the point of pistol.A knows what he is
signing but his consent is not free.The contract in this case is voidable at his
opinion…
The consent,in the above example, is not altogether missing.It is there,but it is not
free
7. COERCION
When a person is compelled to enter into a contract by the use of force by the other party or
under a threat, “COERCION” is said to be employed. Coercion is the committing , or
threatening to commit,any Act forbidden by the Indian Penal Code,1860 Or the unlawful
Detaining,or threatening to detain, any property, to the prejudice of any person whatever,with
the intention of causing any persons to enter into an agreement.it is immaterial whether the
Indian Penal Code,1860 is or is not in force in The place where the coercion is employed
(Sec.15).
8. EXAMPLE
Coercion includes fear, Physical compulsion and menace to
goods:
1. A threatens to shoot B if he (B) does not release him (A) from
a debt which A owes to B.B releases A under the threat.The
release has been brought about by coercion.
2. A threatened to kill B if he does not lend rs 1000 to C. B
agrees to lend the amount to C. The agreement is entered
into under coercion. Consent is said to be caused by coercion
when it is obtained by: committing or threatening to commit
any act forbidden by the Indian Penal code,1860
10. UNDUE INFLUENCE
Sometimes a party is compelled to enter into an agreement against his will as a result of unfair persuasion by
the other party. This happens when a special kind of relationship exists between the parties Such that one
party is in a position to exercise undue influence over the other.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 uses that position to
dominate the will of another
11. EXAMPLES
A having Advanced money to his son,B,during his minority,obtains upon B’s coming Of age,by misuse of parental influence,a
bond from B for a greater amount than the sum due in respect of the advance.A employs undue influence
A, a man enfeedbled By disease or Age, is induced by B’s influence over him as his medical attendant,to agree to pay B an
unreasonable sum for his professional services.B employs undue influence
A spiritual guru induced his devotee to gift to him the whole of his property in return of a promise of salvation of the
devotee.held,the consent of the devotee was given under undue influence.