Free Consent under Law of Contracts

FREE CONSENT UNDER LAW OF CONTRACTS

Section 10 of the Indian Contract, 1872 sets out the various essential conditions of a valid contract. All agreement is a valid contract if they fulfill the following conditions:

• Lawful Consideration
• Lawful Object
• Competent to contract
• Free Consent
• Not expressly declared void

Hence, the aforementioned section makes free consent an essential condition for any contract to be valid and enforceable by law. Section 13 of the Indian Contract Act, 1872 defines Consent and lays down the maxim ‘Consensus-ad-idem’ which means when parties to the contract agreed upon the same thing in the same sense.

Section 14 lays that consent is said to be free when it is not caused by coercion, undue influence, fraud, misrepresentation, or mistake.

Coercion (Section 15, Indian Contract Act, 1872)

Section 15 deals with Coercion. Coercion basically means forcing a person to enter into a contract. As per the provision, Coercion means committing or threatening to commit any act forbidden by the law or unlawfully detaining or threatening to detain any property to cause any person into a contract.

Case Law: Chikkam Ammiraju vs. Chikkam Seshamma [(1917) 32 MLJ 494][1]

This is a case including the coercion wherein the question before the Court was whether coercion could be brought about by a threat to commit suicide. In this case, a husband threatened to commit suicide and thus induced his wife and son to execute a release deed in favor of his brother in respect of certain properties that they claimed to be their own. It was held that a threat to commit suicide amounted to coercion and the deed was voidable.

Undue Influence (Section 16) 

Section 16 deals with the vitiating element of undue influence. At the point when one party to the contract is in a position to dominate the other party and such predominance is used to impact the party to get an unjustifiably favorable benefit, it refers to Undue Influence. Such authority could be a real or apparent or fiduciary relationship between the two parties.

The contract which is caused by undue influence is voidable at the option of the party whose consent was so obtained. Also, the burden of proof is upon the dominant party to show that there was no presence of influence.

Case Law: Wajid Khan vs. Raja Ewaz Ali Khan [(1891) ILR 18 CAL 545][2]

In this case, an old and illiterate woman conferred a high monetary benefit onto her manager without any valuable consideration and it was held that undue influence was applied. The burden of proof was on the manager to show that it was a bonafide transaction and no undue influence was exercised.

Fraud (Section 17)

Section 17 deals with the consent to a contract caused by Fraud. The other word for Fraud is Deceit and when one party makes bogus statements with full knowledge and not carelessly, it adds up to fraud. The fraud is said to be done, if:

• A false statement is made and the person making it does not believe it to be true.
• A promise made without any intention of performing it.
• The active concealment of fact
• Any other act fitted to deceive

On account of fraud, it is important to build up that some misfortune has been caused because of the fraud committed. There can be no fraud if there is no damage. Additionally, the assertion made as the fraud must be a fact and not a sentiment.

Case Law: Shri Krishan vs. Kurukshetra University [1976 AIR 376][3]

The plaintiff was a candidate for the LLB exam. The candidate was short of attendance and failed to specify it in the admission form of the exam. Neither the head of the department nor University authorities tried to conduct a check and find the reality. The Court held that the candidate had not committed any fraud and there was no power in the University to withdraw the candidature of the candidate.

Misrepresentation (Section 18, Indian Contract Act, 1872)

Section 18 deals with the vitiating element of the Misrepresentation. The portrayal of the bogus and incorrect statement is a misrepresentation. The contrast between Fraud and Misrepresentation is the component of intention. Misrepresentation is unintentional and the party making such a statement assumed it to be true. The contract in which consent has been caused by the misrepresentation is voidable at the option of the person whose consent was so caused.

Case Law: Long vs. Lloyd [(1958) 1 WLR 753][4]

The defendant, in this case, sold his lorry to the plaintiff by making a representation which was bogus that the lorry was in good condition. However, after buying it the plaintiff discovered serious defects in the lorry, and instead of rescinding the contract, accepted the defendant’s offer of half the cost of repairs. Subsequently, the lorry broke completely, and the plaintiff wanted to rescind the contract however, the court held that this right did not exist anymore as the plaintiff had affirmed the contract by accepting to share costs.

Mistake

A mistake is an incorrect belief but innocent in nature. The mistake could be either be a mistake of law or a mistake of fact. The mistake of law is basically ignorance of the law and it is not recognized by the Indian Contract Act. On the other hand, the mistake of fact is an error in understanding or ignorance of fact. Such a mistake could either be unilateral or bilateral.

Conclusion

Consent is an integral part of the contract. People tend to rely on the defenses if they are being charged for coercion, undue influence, etc. In the cases of coercion, undue influence, fraud, and misrepresentation, the contract tends to be voidable at the option of the aggrieved party. However, in case of mistake, the parties can only avoid the contract in situations where there exists a bilateral mistake of the party with respect to the important facts of the agreement.

[1]. https://indiankanoon.org/doc/1604481/

[2]. http://14.139.60.114:8080/jspui/handle/123456789/7386

[3]. https://indiankanoon.org/doc/353075/

[4]. https://www.casemine.com/judgement/uk/5a8ff87860d03e7f57ec1081

Author: Ayush Patria,
Sangam University, Bhilwara (Rajasthan); 3rd Year; Law Student