4Free Consent

7/21/2019 4Free Consent

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1. Competent to Contract [Sec-11 & 12]Competent to Contract means:

Capacity - to enter into a valid contractLegal ability - to enter into a contract

Only competent persons can make a legally validcontract.

roadly speaking! t"ere are t"ree categories o#

- $ncompetent %ersons

inors'or( $n#ants '1) *21 years o# age(

%ersons o# +nso,nd ind

%ersons! t"o,g" competent! declared by La asincompetent. [dis,ali/ed to contract]

0",s!ot all d,lts o# So,nd indcan make 3alid Contracts

45amples: $nsolvent6 lien enemy6 7oreign 8iplomat6

%erson ,nder t"e in9,ence o# lco"ol6 Li#e

Convict.


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2. Consent - 8e/ned [Sec -1;]

0"e term


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7ree Consent [Sec @ 1A]

Consentis said to be #ree, "en not ca,sed by:

Coercion [Sec 15]

+nd,e in9,ence [Sec 16]

7ra,d [Sec 17]

isrepresentation[Sec 18]

istake [Sections - 20, 21 and 22] Consentis said to have been ca,sed when ito,ld not "ave been given - b,t #or t"ee5istence o# s,c" vitiating #actors - Coercion

- ,nd,e in9,ence!

- #ra,d!

- misrepresentation

or - mistake.


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Conse,ences o# Coercion:

$hen consent is ca%sed by coercion,- the contract is voidable at the

o&tion o" the

&arty whose consent was soobtained.


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2. +nd,e in9,ence: 'Sec @ 1(D"ere

- a person "o is in a position todominate t"e ill o# anot"erentersinto a contract it" "im6 and

- t"e transaction appearson t"e #ace

o# it! or on t"e evidence! to be,nconscionable!

t"e b,rden o# provingt"at s,c" contract as not ind,ced by ,nd,ein9,ences"all lie ,pon t"e person in t"eposition to dominate t"e ill o# t"e ot"er.E


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+nd,e in9,ence means: improperor,n#air ,se o#one=ss,periorstat,sin order to obtaint"econsento# aperson"o is in a eaker position.

?ere! t"e relations s,bsisting beteen t"e partiesis s,c" t"at

i# One o# t"e parties isin a position to

dominate t"e ill o# t"e ot"er, and

ii# by ,sing t"at position, obtains an ,n#air &,nd,e advantage #rom t"e ot"er.

$n t"eir relations"ip! t"e person dominating may"old 'i(a real orapparent a,t"ority, or

'ii( a,t"ority derived #rom a /d,ciaryrelations"ip. [0r,st & Con/dence based]


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+nd,e in9,ence - ,s,allyinvolves an ab,se o# t"e e5isting

relations"ip beteen t"e parties.

person "as


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$n n,ts"ell! a contract is said to beca,sed 'ind,ced(

'vitiated( by ,nd,e in9,ence "ere

'i( One party to t"e contract is in apositionto dominate t"e

ill o# t"eot"er6and

'ii( t"ereby! "e is in a position toobtain ,n#air advantage

over t"eot"er.


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1. 8ominator "olds real or apparent a,t"orityover t"e ot"er:

'(. )aster Servant*

+a assessin( cer /ssesseeoice ns&ector eron %nder c%stody

2. 8ominator stands in /d,ciary relation it"to ot"er.

0r,stand con/denceare the #o,ndation #or/d,ciary relations.

': 3ather Son+r%stee 4eneciary

Soicitor ientoctor atient

3ianc ance 4etween artners o" a 4%siness 3ir9


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. 8ominator makes a contract it" a person:contract with a &erson whose mental capacity is

temporarily or permanently aGectedby thereason o" age!illnessor 9enta or bodiy

distress

'.(.: /ttendant to criticay i &atient;%rse iterate od &atient

Conse,ences o# +nd,e $n9,ence:

$hen consent is ca%sed by %nd%e in


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7ra,d [Sec @ 1H]4ssential $ngredients o# 7ra,d:

isrepresentationo# #act relating to t"es,b>ect matter o# t"e contractby one person.

ade to anot"er person to ind,ce "imtoenter into a contract

0"eintention is to deceive or c"eatt"e ot"erinnocent party.

Suppressio veri - Suggestio falsi

%romisemadeit"o,t intention o# per#orming

it. ny ot"er act /tted to deceive.

ny s,c" act oromission "ic" la declaresto be #ra,d,lent.


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Suppressio veri.S,ppression o# t"e tr,t".

/ concealment o# tr,t", "en a party is bo,nd to

disclose it! vitiates a contract.

n the contract o# ins,rance

- =nowed(e o" the "acts is re>%ired

- to enabe the %nderwriter- to calc,late t"e c"ances

and

- to #orm a d,e estimate o# t"e risk* and,

in ins,rance contract, &erha&s 9ore than any other -the &arties are re>%ired to represent

every t"ing it" #airness.


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Suppressio veri as ellas

suggestio falsi

- is a gro,ndto rescind anagreement! or- at least not to carry

it into e5ec,tion.

+he contract is voidable.

8amagescan be claimed.


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isrepresentation$nnocent@misrepresentation as

disting,is"ed #rom 7ra,d,lent@misrepresentation.

/n innocent-misstatement o# #act to t"econtractmade by one party to ind,cet"e ot"er to enter into a contract.

0"ere is no desire o# deceiving orde#ra,d"ere.

isrepresentation9ay "a into any oneormoreo" the "oowin( t"ree ';(broadcategories:


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Conse,ences o#isrepresentation

%arty ronged can

void t"e agreement$nsistt"e contract be

per#ormed! and"e be p,t inposition in "ic""e o,ld"ave been! i# t"erepresentationmade is tr,e.


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45ceptional cases - D"eredamages are alloed

Only in some e5ceptional cases damages arealloed @ even t"o,g" it is case o# an innocentmisrepresentation.

45ample.$n t"e b,siness o# an agency,

@ i# t"e agent believes t"at "e "as a,t"ority@ to represent"isprincipal,

@ "ile"e "as no s,c" a,t"ority.

@ gent is liable to damagesbeca,se

@ "e is


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ost $mportant %oint

$# t"e %arty

"oseconsent as ca,sed- by

misrepresentation"ad meanso#discovering tr,t"

- it"ordinarydiligence!

"e "as no remedy.

i i i " d d


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8isting,is"7ra,d andisrepresentation

S.o

7ra,d. isrepresentation.

1. 3ra%d is

co99itted withan intention to

deceive whie

enterin( intocontract.

)isre&resentation is

d%e to innocence.+here is no

intention to deceive

or (ain advanta(e.

2. +ho%(h voidabe,

the &arty wron(ed

t is aso voidabe,

b%t cai9 "or


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S.o 7ra,d. isrepresentat

ion.

. +he ontract can beavoided and

da9a(es can be

cai9ed.

ontract cannotbe avoided, in

case the &arty

wron(ed has a

9eans o"

discoverin( tr%th

with ordinary

dii(ence.


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istake[Sections - 20, 21 and 22]

istake:eans


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istake -1

istake o# 7act incl,des

@ istake o# %rivate Iig"ts o# $ndivid,als@ istake o# J,ality o# %romiseand @ a mi5ed ,estion o# 7actand La

istake o# 7act may be @ ,nilateralmistake

or@ bilateral mistake.1. +nilateral istake

$here ony one party to a contractis mistaken as to t"e terms o# t"e contract.

2. ilateral istake$here bot" t"e parties to a contract are mistaken as tot"e terms o# t"e contract.


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Conse,ences o# istake o# La

mistakeas to a la in #orce in $ndiadoes notrender a contract voidable. 0"econtract is validand en#orceable at la.

Ieason:One s"o,ld not be ignorant o# la o# "island.

mistake as to la not in #orce in $ndia istreated as a mistake o# #act! and a mistakeas to s,c" a la not in #orce in $ndiao,ldrendert"e contract void.

Ieason: One need not necessarily kno la not in#orce

in $ndia i.e. 7oreign La.


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istake o# 7act +nilateral istake [Sec @ 22]

I,le-1: Contract is not voidable merely beca,se

@ it as ca,sed by one o# t"e parties to it

being ,nder a mistake as to a #act.

45ample.

$#! "ile intending to sell "o,se to #or Is.;K!KKK*- tells "im t"at t"e price o# "is "o,se is Is.1;!KKK*- and i# accepts it! t"e contract beteent"em ill be valid and en#orceable #or Is. 1;!KKK*-only. cannot arg,e t"at "e as mistaken "ile

speaking o,t t"e price correctly and t"e contractm,st be set-a-side.

0"is cannot be treatedas an erroro# mind@ consensus ad idem. 0"ere are certain

e5ceptions to t"is I,le! "ic" #ollo ne5t e.


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45ceptions to t"is r,le ,nder Section @ 22

(. D"ere t"ere is a mistake as to t"e identity o# t"epersonit" "om t"e agreement is being enteredintoandt"e ot"er party is aare o# t"e /rst party=smistake.

Ies,lt: S,c" a mistake ill de#eat consent.Iender t"e contract invalid

only "en- party "as a speci/c person in mind

it" "om t"e party intends t"at t"econtracts"o,ld be e5ec,ted.

nd! - 0"is identity m,st be material to t"eparty "en entering into t"e contract.


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45ample:


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45ceptions to t"is r,le ,nder Section @ 22

(. 0"e contract ill not be void! "ere t"emistakeis - one o# attrib,tes! and

- not one o# identity o# t"e person.

45ample:


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C(. 0"ere are also instances "ere t"e plea o#

non est factumis taken.

Non est factummeans


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ote:+he the &ea o" non est factum is a very

narrow area, and to "a within it, one s"o,ld "ave somegen,ine reason "y one did not read t"e doc,ment t"atone signed.

Ieason:+he la ,s,ally ass,mes t"at t"e person signinga doc,ment "as - read!

- ,nderstood!

and - agreed to it.

/ (ood e5ample o# agen,ine reasonis where

- the partyin >%estion is illiterate! and- t"e person "o reads t"e doc,ment to t"em

made a mistake in reading t"e doc,mento,talo,d.


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I,le-2: nerroneo,s opinion abo,tval,e o# t"eob>ect o# an agreement is - deemed not tobe a mistake as to a #act.

45ample::

- =agrees to b,y a car #rom


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Conse,ences o# istake

1. istake o# $ndian La:

@ greement is en#orceable

@ Contract is not voidable

@ $gnorance o# La is no e5c,se[Ignorantia juris non excusat].

@ greement is en#orceable as contract.

2. istake o# 7oreign La: ot$ndian La#)ista=e as to a la not in #orce in $ndia has

the sa9e eGect as a mistake o# #act [Sec @21] 0"e Contract is 3oidable or 3oid.


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8octrine o# +n>,st 4nric"ment

Iestit,tion,nder-

3oidgreements [Sec @

B] - 3oidablegreements

[Sec @ A]

Iemedy ,nder Speci/c Ielie# ct[Sec - ....]


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Section @ A as to 3oidable Contract

Section A o# t"e $ndian Contract ct reads

t",s:MD"en a person! at "ose option a contract is

voidable!rescinds it

- - 0"e ot"er party t"ereto -need notper#orm anypromise therein contained o" which he is &ro9isor.

- 0"e party

rescinding a voidable contract s"all!i# hereceived any bene/t there %nder #romanot"er partyto s%ch contract,restore s,c"bene/t! so #ar as may be! to t"e person #rom"om it as received.N


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Section @ B as to 3oid Contract

Section B o# t"e $ndian Contract ct readsas ,nder :

MD"en

- an agreement is discovered to be voidor

- "en a contract becomes void!any person "o "as received any

advantage ,nder s,c" agreement orcontract- is bo,nd to

restore it! or- to make compensation #or it!to t"e person #rom "om "e received

it.N

Iemedy ,nder Speci/c Ielie#


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Iemedy ,nder Speci/c Ielie#ct! 1)HH.

Section A1! Speci/c Ielie# ct! 1)HH reads

as "oows:MOn ad>,dging t"e cancellation o# aninstr,ment, t"e Co,rt may re,ire t"eparty to "om s,c" relie# is grantedto

make any compensation to t"e ot"er"ic" >,stice may re,ire.B

0"is section gives discretion to t"e co,rtto order compensation! depending ,pon

t"e circ,mstances o# eac" case -"ic">,stice may re,ire.B

?ence!no body can claimit as a matter o# rig"t.

8istinction beteen 1 $t is a contract


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8istinction beteen

3oid greements.

1. $t cannot be en#orced byany o# t"e parties to it.

2. $t is void ab initio i.e. #romt"e beginning.

;. $t implies an agreement"ic" does not satis#y t"ere,irements o# Sec-10i.e.

a( it is made it"o,tconsideration6

or b( by incompetentpersons6

or c( its consideration or

ob>ect is not la#,l6or d( t"e consent o# t"e

parties is not #ree

or e( it is e5pressly declared

id

3oidable Contracts.1. $t is a contract

voidable at t"e optiono# one o# t"e partiest"ereto.

2. $t does not becomevoid ,nless t"e partyat "ose option it isvoidable @ rep,diates

it.;. $t implies a contract

in "ic" t"e consento# one o# t"e partiesto it is not #ree! i.e. it"as been obtainedeit"er by

a( coercion

or b( ,nd,e in9,ence

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4Free Consent