This document provides definitions and explanations of key concepts related to contract law such as consent, free consent, coercion, undue influence, fraud, misrepresentation, and mistake. It defines consent as two parties agreeing to the same thing in the same sense. Free consent is consent that is not caused by coercion, undue influence, fraud, or misrepresentation. Coercion involves using force to compel an agreement while undue influence involves exploiting a power imbalance. Fraud involves intentional deception while misrepresentation can be unintentional. Mistakes can be of fact or of law, and mistakes of fact can make a contract void in some cases.

1. CONTRACT
AND
CONSENT
-SHIVANI SHARMA
-ASSISTANT PROFESSOR
-SARDAR PATEL SUBHARTI INSTITUTE OF LAW

2. WHAT IS CONSENT?
• In the Contract Act, the definition of consent is given under
Section 13, which states that:
“it is when two or more persons agree upon the same thing
and in the same sense”.
• So the two people must agree to something in the same
sense as well.
• Let’s say for example A agrees to sell his car to B. A owns
three cars and wants to sell the Maruti. B thinks he is buying
his Honda. Here A and B have not agreed upon the same
thing in the same sense. Hence there is no consent and

3. WHEN THE CONSENT IS ‘FREE CONSENT’?
Free Consent has been defined in Section 14. The section
says that consent is considered free consent when it is not
caused or effected by the following,
• Coercion
• Undue influence
• Fraud
• Misrepresentation
• Mistake

4. COERCION

5. DEFINITION OF COERCION
• Coercion means using force to compel a person to enter into a
contract. So force or threats are used to obtain the consent of the
party under coercion, i.e. it is not free consent.
• According to Section- 15:
“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.
Explanation.—It is immaterial whether the Indian penal code is or is
not in force in the place where the coercion is employed.”

6. • Illustration: A, on board an English ship on the high seas,
causes B to enter into an agreement by an act amounting
to criminal intimidation under the Indian penal code (45
of 1860). A afterwards sues B for breach of contract at
Calcutta. A afterwards sues B for breach of contract at
Calcutta.
• A has employed coercion, although his act is not an
offence by the law of England, and although section 506
of the Indian penal code (45 of 1860) was not in force at
the time when or place where the act was done.

7. • Now the effect of coercion is that it makes the contract
voidable.
• This means the contract is voidable at the option of the
party whose consent was not free. So the aggravated
party will decide whether to perform the contract or to
void the contract.
• Also, if any money has been paid or goods delivered
under coercion must be repaid or returned once the
contract is void.
EFFECTS OF AGREEMENT BY
COERCION

8. UNDUE INFLUENCE

9. DEFINITION OF UNDUE
INFLUENCE?
• Section 16 of the act contains the definition of undue influence. It
states that when the relations between the two parties are such
that one party is in a position to dominate the other party, and
uses such influence to obtain an unfair advantage of the other
party it will be undue influence.
• The section also further describes how the person can abuse his
authority in the following two ways,
1. When a person holds real or even apparent authority over the
other person. Or if he is in a fiduciary relationship with the other
person

10. • Say for example A sold his gold watch for only Rs 500/- to
his teacher B after his teacher promised him good grades.
Here the consent of A (adult) is not freely given, he was under
the influence of his teacher.
• Now undue influence to be evident the dominant party must
have the objective to take advantage of the other party.
• Smt Takri Devi v Smt Rama Dogra – Gift to advocate by
illiterate woman
• But if consent is not free due to undue influence, the contract
becomes voidable at the option of the aggravated party.
ESSENTIALS

11. AGREEMENT BY PARDANASHEEN WOMEN
• Pardanashin lady, means the women who, according to the customs,
ought not to be compelled to appear in public, shall be exempt from
personal appearance in court. - Code of Civil Procedure, 1989, s. 132
• A lady in a veil, normally worn by Muslim ladies as a customary dress.
Pardanashin woman, is a woman of rank, Hindu or Mohammed an, who
lives in seclusion shut in the zanana and having no communication
except from behind the parda or screen with any male person save a few
privileged relations or dependents; and not a woman who communicates
with strangers, collects rents from tenants, is literate with a certain
amount of education, who subscribes to newspapers and arranges her
affairs, Shivmala Tej Singh V. Ram Charan Kundanlal, (1980) MP LJ 530.
• Law provides special protection to pardanshin women on the
grounds of their being ignorant so far as the worldly knowledge
goes. A contract with a pardanshin woman is presumed to have

12. UNCONSCIONABLE BARGAIN
• An unconscionable bargain is on as sane man not setting under A
delusion would make, and no honest man would take advantage
of. In such cases it is for the dominant party to rebut the
presumption of undue influence.
• Every transaction where the terms are to the disadvantage of one
of the parties need not necessarily be considered to be
unconscionable. If the contract is to the advantage of presumption
of undue influence would not be raised.
• As between parties of equal footing, mere unconscionableness of
the bargain does not create presumption of undue influence.

13. FRAUD

14. DEFINITION OF FRAUD
• Fraud means deceit by one of the parties, i.e. When one of the
parties deliberately makes false statements. So the
misrepresentation is done with full knowledge that it is not true,
or recklessly without checking for the trueness, this is said to be
fraudulent. It absolutely impairs free consent.
• According to Section 17, a fraud is when a party convinces
another to enter into an agreement by making statements that are:
1. Suggesting a fact that is not true, and he does not believe it to
be true
2. Active concealment of facts
3. A promise made without any intention of performing it

15. ESSENTIALS
• Example. A bought a horse from B. B claims the horse can be used
on the farm. Turns out the horse is lame and A cannot use him on
his farm. Here B knowingly deceived A and this will amount to
fraud.
• One factor to consider is that the aggravated party should suffer
from some actual loss due to the fraud.
• There is no fraud without damages.
• Also, the false statement must be a fact, not an opinion. In the
above example if B had said his horse is better than c’s this would
be an opinion, not a fact. And it would not amount to fraud.
• Intentional Misinterpretation is the essence of Fraud. (Sri Krishna v
Kurukshetra University – Low attendance in form)

16. IS SILENCE FRAUD?
• Under the following conditions, silence amounts to fraud:
1. Duty To Speak – Mithu Lal Naik V L.I.C.
2. Silence Itself Is Equivalent To Speech
3. Change In Circumstances
4. Half Truths
• Exception — Section – 19 - if such consent was caused by
misrepresentation or by silence, fraudulent within the meaning of
Section 17, the contract, nevertheless, is not voidable, if the party
whose consent was so caused had the means of discovering the
truth with ordinary diligence.

17. EFFECT OF FRAUD
• Section 19 of the act states that:
“When consent to an agreement is caused by coercion,
1[***] fraud or misrepresentation, the agreement is a
contract voidable at the option of the party whose consent
was so caused. A party to contract, whose consent was
caused by fraud or misrepresentation, may, if he thinks
fit, insist that the contract shall be performed, and that he
shall be put in the position in which he would have been if
the representations made had been true.”

18. MISREPRESENTATION

19. DEFINITION
• Misrepresentation is also when a party makes a representation
which is false, inaccurate, incorrect etc. The difference here is the
misrepresentation is innocent, i.e. Not intentional.
• Section – 18- “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 of the person committing it, or any one claiming
under him, by misleading another to his prejudice, or to the
prejudice of any one claiming under him;

20. COMPARISON FRAUD MISREPRESENTATION
Meaning A deceptive act done
intentionally by one party in
order to influence the other
party to enter into the contract
is known as Fraud.
The representation of a
misstatement, made innocently,
which persuades other party to
enter into the contract, is
known as misrepresentation.
Defined in Section 17 of the Indian
Contract Act, 1872
Section 18 of the Indian
Contract Act, 1872
Purpose to deceive the other
party
Yes No
Variation in extent of truth In a fraud, the party making the
representation knows that the
statement is not true.
In misrepresentation, the party
making the representation
believes the statement made by
him is true, which subsequently
turned out as false.
Claim The aggrieved party, has the
right to claim for damages.
The aggrieved party has no
right to sue the other party for
damages.
Voidable The contract is voidable even if
the truth can be discovered in
The contract is not voidable if
the truth can be discovered in

21. MISTAKE

22. EXPLANATION
• A mistake is an erroneous belief that is innocent in nature. It leads
to a misunderstanding between the two parties. Now when talking
about a mistake, the law identifies two types of mistakes, namely;
A mistake of law, A mistake of fact.
MISTAKE
MISTAKE OF FACT MISTAKE OF LAW

23. • Section – 20 – Effect as to 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. Explanation.—An erroneous opinion as to the
value of the thing which forms the subject-matter of the
agreement, is not to be deemed a mistake as to a matter
of fact.”
• Illustration - 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. (B) A agrees to buy from B a certain
horse. It turns out that the horse was dead at the time of

24. • Section – 21- Effect of mistakes as to law— “A contract is not
voidable because it was caused by a mistake as to any law in force
in 11 [India]; but a mistake as to a law not in force in 1[India] has
the same effect as a mistake of fact” (non est factum)
• Illustration - 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. 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.“
• Section – 22 - Contract caused by mistake of one party as to
matter of fact— “A contract is not voidable merely because it was
caused by one of the parties to it being under a mistake as to a
matter of fact. —A contract is not voidable merely because it was
caused by one of the parties to it being under a mistake as to a

25. ESSENTIALS
1. There Should Be No Mistake Of Law – Ignorantia Juris Non
Excusat
2. Mistake Of Fact Is Not An Erroneous Opinion
3. Mistake Should Be Essential To Agreement – Identities Of
Parties, Identity And Nature Of Subject Matter, The Nature
And Content Of The Promise Made
4. Mistake Of Quality Is Not Mistake – Smith V Hughes
5. Mistake As To Existence Of Subject Matter – Non
Existence, Title Or Rights – Cooper V Phibbs, Different
Subject Matter In Mind, Mistake Of Substance Of Subject
Matter, Mistake Of Nature Of Promise, Mistake As To