IIMT COLLEGE OF MANAGEMENT TOPIC FREE CONSENTByRazi Anwar
CONSENT Meaning This is called „consensus –ad –idem‟. Means the matching of minds. According to sec-13 “two or more persons are said to consent when they agree upon the same thing in the same sense.” Thus , consent involves identity of minds in respect of the subject matter of the contract.
FREE CONSENT Free consent is one of the essential elements of a valid contract. It is evidenced by section-10 which provides that all agreements are contracts if they are made by the free consent of the parties.
Contd.. A consent is said to be free when it is not caused by – Coercion , or Undue influence, or Fraud , or Misrepresentation , or Mistake.
1. COERCION Coercion means compelling a person to enter into a contract under a pressure or a threat. According to sec-15, a contract is said to be caused by coercion when it is obtained by-1. Committing any act which is forbidden by the Indian penal code .2. Threatening to commit any act which is forbidden by the Indian penal code .
Contd..3. Unlawful detaining of any property .4. Threatening to detain any property.5. Threat to sue on the basis of falls.6. Threat to commit suicide. Example; X beats y and compels him to sell his car for Rs 50000. Here y is consent has been obtained by coercion because beating someone is an offence under the Indian penal code.
Consequences of coercion Voidable. Restitutions to take place. Reinstallation or restoration.
2. UNDUE INFLUENCE The term „undue influence‟ means dominating the will of the other person to obtain an unfair advantage over the other . Where the relations between the parties are such that one of them is in a position to dominate the will of the other. The dominant party uses that position to obtain an unfair advantage over the other.
Presumption of domination of will1. Where one party holds a real authority over the other. Example - Police officer and criminal, - Income tax officer and assesses. etc. -Guardian and ward. -Trustee and beneficiary.
2. Where a one party have a fiduciary relationship with the other party. Example -father son relationship, -doctor patient relationship.etc
3. Where one person or a party makes a contract with other person or party who is in mental distress. Example - widow, -old person, -father of death son.etc
3. FRAUD Meaning The term „fraud‟ means a false representation of fact made willfully with a view to deceive the other party. Fraud means a committed by a party to a contract or with his connivance, or by his agent ,with intent to deceive another party to induce him, to enter into the contract. Example X sells to y locally manufactured goods as imported goods charging a higher price ,it amounts to fraud.
Essential of a fraud The main essential rules of a fraud:1.The fraudland act must be committed with an intention to cheat.2.The fraudland act must be committed with knowledge of its falsity.3.The fraud must have been committed only by the party of the contract or by the his authorized agent .4.A promise to made without any intention to perform it.5.Mere silence is not a fraud.
Consequences of a fraud Voidable contract. Restitution should take place. Claim for damages also. Punishable offence.
4. MISREPRESENTATIONMeaning Misrepresentation may be defined as an innocent miss-statement of facts which are material for the contract. Or , misrepresentation is a falls representation, which is made innocently.
Legal rules of misrepresentation1.It must be a material fact.2.The misrepresentation must be false, but the person making it honestly believe it to be true.3.Breach of duty: sometimes there is a time gap between the statement of a fact and the finalization of the contract .during this time, there may be a change in circumstances , which may be brought to the notice of a party by the other.
Example of misrepresentation: X says to y who intends to purchase his land, “my land produces 2 tons of rice per acre.” x believes the statement to be true although he has no sufficient ground for the belief .y purchases x ‟ s land believing x ‟s statement . Later on , y finds that the land produces only 1.5 tons of rice per acre. Here x ‟s representation is misrepresentation.
Consequences of misrepresentation Voidable . No tort
MISTAKEMeaningMistake is an error in the subject matter of an contract.Mistake can be two types: mistake mistake of fact mistake of law
a. Mistake of fact 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. Example A agrees to buy from B a certain horse. It turns out that the horse was dead at the time of the bargain, though neither party was aware of the fact. The agreement is void because there is bilateral mistake as to the existence of subject matter.
b. Mistake of law When a party enters into a contract, without the knowledge of law in the country, the contract is affected by such mistake but it is not void. A contract is not voidable because it was caused by a mistake as to any law enforce in India. The reason here is that ignorance of law is not an excuse at all. However if a party is induced to enter into a contract by the mistake of law then such a contract is not valid.
Example A and B make a contract grounded on the erroneous belief that a particular debt is barred by the Indian Law of Limitation; the contract is not voidable.