business law

2.  Consent
 Free Consent
 Coercion
 undue influence
 Fraud
 Misrepresentation
 Mistake

3.  According to section 10 of The Contract
Act, it is compulsory for the validity of the
contract that the consent of all the
contracting parties must be free.
 There should not be any pressure on any
party while giving their consent at the time of
entering into a valid contract

4.  Section 13 : Consent (will)
 Definition:
 “Two or more persons are said to consent
when they agree upon the same thing in the
same sense’
 Illustration: A offers to sell his horse to B for
Rs. 20000 and B agrees to purchase the
horse at the same price. It means that
parties are at consent.

5.  According to section 14 of The Contract Act,
the consent is said to be free when it is not
caused by
5
1. Coercion (Section 15)
2. Undue Influence (section 16)
3. Fraud (Section 17)
4. Misrepresentation (Section 18)
5. Mistake (Subject to the provision of section 20,21
and 22)

6.  Coercion simply means: Compelling someone to do
something by using force/threat/pressure.
 According to section 15 of the contract act, the coercion
has been defined as folllows:
 ‘Coercion is the committing or threatening to commit, any
act forbidden by Pakistan Penal Code or 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’.
 Illustration: A threatens to kill if he does not lend
Rs.100000 to A. B agrees to lend. This contract has been
entered by coercion.

7.  Consent is said to obtain by coercion if it is
obtained by in the following two ways;
 1.Someone is doing something /threatening
to do something
 2.Unlawfully detaining/threatening to detain
any property.
Prohibit
ed by
PPC

8.  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 obtain an
unfair advantage over the other.

9.  “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.
 Fraud is a false representation of fact, made
with a knowledge of its falsehood without belief
in its truth , with the intention that it would be
acted upon by the other party and actually
inducing him to act upon it .

10.  A sells his horse to B which A knows to be
unsound. But A says to B that horse is quite
sound. B believes and purchase it. This is a
fraud committed by A.

11.  According to Section 18 of The Contract Act,
“Misrepresentation” means and includes.
 When one person guides to another about
anything that he believes to be true but
actually that is not true and it is not in his
knowledge he is said to make
misrepresentation.

12.  A by misrepresentation, leads B erroneously
to believe that five thousand bulbs are made
annually at A’s factory. B enters into an
agreement believing on A for the purchase of
the factory. But actually four thousand bulbs
are produced at A’s factory. The contract has
been caused by misrepresentation.

13.  1. By meaning
 2. Nature of Pressure
 3. Pressuring Party
 4. Pakistan Penal Code
 5. Nature of Offence

14.  6. Illegal and Unfair
 7. Relationship
 8. Objective of an Act
 9. Burden of Proof
 10. Refund of Benefits

15.  1. False Statement
 2. Intention
 3. Main Purpose
 4. Concealment of Facts
 5. Rights to claim damages

16.  6. Knowledge of Facts
 7. Undue Advantage
 8. Wider scope
 9. Right to avoid the contract
 10. Nature of Fault

17.  Under the meaning of Law, any type of fault
regarding the facts of a thing for which
contract is made, or regarding the provisions
of law is known as mistake.
 It is necessary for the validity of a contract
that there must be free consent of all the
contracting parties.
 When both the parties of the contract are at
mistake, the contract is void and not valid.

18.  1. Mistake of Facts
 2. Mistake of Law Unilateral
Bilateral
Mistake of
Pakistani Law
Mistake of
Foreign Law
Unilateral
Bilateral