The document outlines various concepts related to contract law in Pakistan including free consent, coercion, undue influence, fraud, misrepresentation, and mistake. It discusses the meaning, essential elements, effects and burden of proof for each concept. Examples and case studies are also provided to illustrate key points. The presentation appears to be an educational overview of these important contract law topics under the Pakistan legal system.

2. Presenter:
 Iqra Nawaz
(12.Arid.1427)
Arid Agriculture Pakistan

3. Plan of Presentation
 Free consent, coercion (meaning , effects & burden of
proof )
 Undue influence (meaning , presumption, burden of
proof, effects) & case study of pardahnashi lady.
 Fraud (forms, essentials, silence to fraud, exception,
effects, & its burden of proof)
 Misrepresentation (meaning, form, essential, effects,
burden of proof) Contract of utmost good faith & loss of
right of cancellation.
 Mistake (meaning & types) brought to you.

4. Free Consent

5. Free Consent
A contract without free consent is
voidable contract.

6. Flaw in consent
(Sec 14)
Coercion
(sec15)
Undue
influence
(sec 16)
Misrepresen-
tation
(sec 17,18)
Mistake
(sec 20,21)
Fraudulent or willful
(sec 17)
Innocent or
Unintentional
(sec 18)
Mistake of fact
(sec 20)
Mistake of law
(sec 21)

7. Case:
 An illiterate women executed a deed
of gift in favor of her nephew under the
impression that she was executing a
deed authorizing her nephew to
manage her lands. The evidence
showed that the woman never
intended to execute such a deed of
gift, nor was the deed ever read or
explained to her.
 Held the deed was void and
inoperative.

8. Meaning Of Consent
 According to Section 14 two or more
persons are said to consent when they
agree upon the same thing in the same
sense.
 This means that there should be perfect
identity of mind regarding the subject matter
of the contract.

9. Free Consent
 To make a contract valid not only consent is
necessary but the consent should also be
free.
 Section 14 says the consent is said to be
free when it is not caused by any of the
following :
(a) Coercion (sec 15)
(b) Undue influence [sec 16, (1 & 2)]
(c) Fraud (sec 17)
(d) Misrepresentation (sec 18)
(e) Mistake (sec 20,21)

10. Coercion
 Coercion is committing or threatening
to commit any act forbidden by the
Pakistani Penal Code , or the unlawful
detaining or threatening to detain any
property to the prejudice of any
person, whatsoever with the intention
of causing any person to enter into an
agreement.

11. An example of Coercion

12. Is Threat To Commit?
 Person commits or threatens to commit any
act which is forbidden by the Pakistan penal
code to compel the other party to enter into
a contract, it is a contract made under
coercion.
Example: W threatens to shoot M, if he
does not give his house on rent. M agrees.
The consent of M is obtained by coercion

13. Threat to Detain Property
 If a person unlawfully
detains or threaten to
detain the property of
another person to
compel him to enter
into an agreement, the
agreement is voidable
at the option of
aggrieved party.
Example: The govt
threatened to seize to
property of A to
recover fine due from
is son B. A paid to fine
. It was held that fine
was recovered by

14. Threats to the Third Party
 Threats may be given to third persons who
are near relatives of the person making the
contract, coercion need not be used only by
the contracting party; it can be used by any
person related to the party.
Example: C threaten to kidnap B’s son if he
does not give him Rs. 2 lac. B agrees. The
agreement is made by coercion.

15. Enforcement of Pakistan Penal
Code
PPC , 1860 is
enforced or not at
the place where
the coercion is
employed if suit is
field in Pakistan
provisions of PPC
will apply.

16. Effect of Coercion (sec 19, 64, &
72)
 The contract is voidable at the option of the party
,whose consent is so obtained by Coercion
 When aggrieved party decides to cancel the
contract , he must return the benefit received from
the other party.
 The other party to whom money was paid or
anything delivered under Coercion must repay or
return it.
 If aggrieved party does not decide to cancel the
contract, it remains a valid contract.

17. Undue Influence [sec 16 (1 & 2)]
A contract is said to be induced by
undue influence where the relations
subsisting b/w the parties are such that
one of the parties is in position to
dominate the will of other and uses the
position to obtain an unfair advantage
over the other.

18. Undue influence

19. Undue influence 16 (1)
 Position to dominate:
In order to prove undue influence b/w the parties one
of them must be in a position to dominate the will of
other party. The person in a superior position may
obtain a consent of other party.
 Unfair advantage:
in order to prove undue influence is necessary
that the party who is in dominating position must
have used his position to obtain an unfair
advantage from the other party.

20. Undue influence sec16 (2)
The person who can dominate:
 Real or Apparent Authority.
 Fiduciary relation.
 Mental distress.

21. Presumption of undue influence
 Doctor and patient
 Lawyer and client
 Guardian and ward
 Trustee and beneficiary
 Teacher and student
Burden of proof:
In this case burden of proof lies on the
dominating persons

22. No presumption of undue
influence
 Husband and wife
 Landlord and tenant
 Creditor and debtor
 Principle and agent
 Mother and daughter
Burden of proof:
In this case burden of proof lies on the
weaker party.

23. Contract with Pardahnashin
Lady
 Pardahnashin lady (observe complete
pardah and does not contact with
people other the her family)
Burden of proof:
In this case burden of proof lies on the
other party to prove that no undue
influence was applied by him.

24. Fraud

25. Meaning of fraud (Sec. 17)
Fraud may be defined as an intentional
or willful misstatement of facts which
are necessary for formation of the
contract.

26. Definition under law (sec 17)
 Fraud means and includes any of the following
acts committing by a party to a contract, or with
his connivance, or by his agent with intent to
deceive another party there to or his agent, or to
induce him , to enter in to the contact:
 A suggestion as to fact of that which is not true
by one who does not believe it to be true.
 An active concealment of a fact by one having
knowledge or belief of the fact.
 Any other act fitted to deceive.
 A promise made without any intention of
performing it.
 Any such act or omission as the law secially
declares to be fraudulent.

27. Forms of fraud
1. False statement
2. Active
concealment
3. Intentional non-
performance
4. Intention or
deceive
5. Act or omission

28. Essentials of fraud
 The false statement or act made by the party must be
false.
 The false statement or act was made to induce the
other party to contract.
 The statement or act was made to induce the other
party to contract.
 The statement or act was made with the knowledge of
it being false.
 The false statement or act was made before formation
of the contract.
 The aggrieved part must have relied upon the false
statement or act.
 The fraud must be committed by a party to the contract
or his agent
 The aggrieved party was deceived by the fraud.

29. Silence as to fraud
 Mere silence as to facts
likely to affect the
willingness of a person
to enter in to a contract
is not fraud, Unless the
circumstances of the
case are such that,
regard being had to
them, it is the duty of the
Person keeping silence
to speak, Or unless his
silence is, in it self,
equivalent to speech. Concealment by mere silence is not fraud

30. Exception to “Silence as to fraud”
 Duty to speak
 Silence is equivalent to speech

31. Effect of Fraud
 He can cancel the contract.
 He can accept the contract and ask for its
performance.
 He can avoid the performance of the contract.
 He can demand his to be restore where it existed
before the fraud.
 He can sue for damages.
 If silence amount to fraud, aggrieved party cannot
cancel the contract if he could discover the truth
with ordinary diligence.
 If fraud does not induce aggrieved party to enter in
to contract is not voidable.

32. Burden of proof
 The Burden of proof that fraud was
committed lies on the party who want
to set aside the contract on basis of
fraud.

33. Misrepresentation

34. Misrepresentation (SEC18)
 The term misrepresentation means false
representation of a fact made innocently or
non-disclosure of material fact without any
intention to deceive the other party.
According to Section 18, misrepresentation
means and includes:
 The position assertion.
 Any breach of duty.
 Causing, however, innocently.

35. Forms of Misrepresentation
 Positive Assertion.
The positive assertion means an absolute, full and
clear statement of a fact. There is misrepresentation
when a person makes a clear statement of facts about
the contract without any reasonable justification,
believing it to be true though it is not true.
 Inducing Mistake.
The subject matter of every agreement must clearly
be understood by all the parties to the contract. If one
party induces the other party, though innocently, to
commit a mistake regarding the nature or quality of
subject matter of the agreement, it is considered as
misrepresentation.

36. Forms of Misrepresentation
 Breach of Duty:
A breach of duty which gives an advantage to the
person committing it and causes loss to the other party
is a form of misrepresentation. If it is committed without
intention to deceive the other party. Where one party is
under legal obligation to disclose all material facts to the
other party but the concerned party does not disclose it.
 Inducing mistake:
The subject matter of every agreement must clearly be
understood by all the parties to the contract. If one party
induces the other party, though innocently, to commit a
mistake regarding the nature or quality of subject matter
of the agreement, it is considered as misrepresentation.

37. Essentials of
Misrepresentation
 It must be made innocently and person making it
honestly believes it to be true.
 It must relate to the fact essential to the contract. Mere
expression of opinion is not misrepresentation.
 The statement made must be true.
 It must induce the other party to enter into a contract.
 It must be made without any desire to deceive the other
party.
 The other party must suffer a lose
 The other party cannot discover the truth by ordinary
diligence.

38. Effects of Misrepresentation
 He can rescind the contract.
 He can accept the contract and ask the other party for
restoration
Aggrieved party loses the right:
 If consent was given with the knowledge of
misrepresentation
 If third party acquired rights in the subject matter of the
contract in good faith and for value.
 If aggrieved party could discover the truth with ordinary
diligence

39. Burden of Proof
The burden of proof that
misrepresentation was used lies on
the party who wants to set aside the
contract on ground of
misrepresentation.

40. Contracts of utmost good faith
 Fiduciary relationship
 Contract of insurance
 Contract of purchase of shares
 Contract of sale of land
 Contract of partnership
 Contract of guarantee
 Contract of marriage engagement
 Contract of family settlements

41. Loss of right of cancellation
 Affirmation
 Restitution not possible
 Lapse of time
 Rights of third party

42. Mistake
 Defined as incorrect belief which leads
one party to misunderstand the other.

43. Types of Mistake
 Mistake of fact:
◦ Bilateral mistake
◦ Unilateral mistake
 Mistake of law:
◦ Mistake of Pakistani law
◦ Mistake of foreign law

44. Mistake of fact
 Bilateral Mistake
◦ Existence of Subject
matter
◦ Identity of Subject Matter
◦ Ownership of Subject
matter
◦ Quantity of subject
matter
◦ Quality of subject matter
◦ Possibility of
performance
 Unilateral mistake
◦ Valid contract
◦ Voidable contract
◦ Void agreement
 Identity of party
 Nature of contract