Free Consent (2)

8/8/2019 Free Consent (2)

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FREE CONSENTFREE CONSENT



MEANING OF CONSENTMEANING OF CONSENT

According to section 13 two or more personsAccording to section 13 two or more persons

are said to consent when they agreeare said to consent when they agree upon theupon the

same thing in the same sense.same thing in the same sense. This means thatThis means that

there should be perfect identity of mind,there should be perfect identity of mind,

regarding the subject matter of the contract.regarding the subject matter of the contract.

KAPIL KATUKEKAPIL KATUKE8/23/20108/23/2010



FREE CONSENTFREE CONSENT

To make a contract valid not only consent isTo make a contract valid not only consent is

necessary but the consent should also be free.necessary but the consent should also be free.

Section 13 says the consent is said to be free when itSection 13 says the consent is said to be free when it

is not caused by any of the following :is not caused by any of the following :

(a) Coercion(a) Coercion--sec 15sec 15

(b) Undue(b) Undue ± ±sec 16sec 16

(c) Misrepresentation(c) Misrepresentation ± ±sec 17,18sec 17,18(d)Fraud(d)Fraud--sec 17sec 17

(e) Mistake(e) Mistake ± ±sec 20,21sec 20,21




Flaw in consent

Coercion(sec15)

Undue influence(sec 16)

Misrepresentation(sec 17,18)

Mistake(sec 20,21)

Faudulent or wilful

(sec 17)Innocent or

Unintentional

(sec 18)

Mistake of fact(sec 20)

Mistake of law(sec 21)




1.Coercion1.Coercion

SECTION 15SECTION 15 ± ±coercion is committing or coercion is committing or

threatening to commit any act forbidden by thethreatening to commit any act forbidden by the

Indian Penal code, or the unlawful detaining or Indian Penal code, or the unlawful detaining or threatening to detain any property to thethreatening to detain any property to the

prejudice of any person ,whatsoever with the prejudice of any person ,whatsoever with the

intension of causing any person to enter into anintension of causing any person to enter into an

agreement .agreement .




An example of Coercion




Is Threat to commit suicideIs Threat to commit suicide

coercion?coercion? Madras high court has held by a majority judgmentMadras high court has held by a majority judgment

thatthat even a threat to commit suicide is coercion eveneven a threat to commit suicide is coercion even

though it is not punishable under the Indian penalthough it is not punishable under the Indian penal

code .code .

Example: A man by giving a threat to commit suicideExample: A man by giving a threat to commit suicide

induces his wife and son to execute a deed in favour induces his wife and son to execute a deed in favour

of him in respect of certain property and they execute.of him in respect of certain property and they execute.

Held that the consent of the wife and son has obtainedHeld that the consent of the wife and son has obtained

through coercion.through coercion.




Effect of coercionEffect of coercion--section 19section 19

When the consent of a party to an agreement isWhen the consent of a party to an agreement is

obtained by coercion ,the contract becomesobtained by coercion ,the contract becomes

voidablevoidable at the option of the party ,whoseat the option of the party ,whose

consent is so obtainedconsent is so obtained

The burden of proving that the consent wasThe burden of proving that the consent was

obtained through coercion shall be upon theobtained through coercion shall be upon the

party who wants to set aside the contract on party who wants to set aside the contract on

the plea of contract.the plea of contract.






Example of undue influenceExample of undue influence

By operation you just execute a deed of giving your

Whole property to me




Following are the partiesFollowing are the parties

that can be affected bythat can be affected by

undue influenceundue influence

Doctor and patientDoctor and patient

Lawyer and clientLawyer and client

Guardian and wardGuardian and ward

Trustee and beneficiaryTrustee and beneficiary

Teacher and studentTeacher and student




Difference betweenDifference between

coercion and undue influencecoercion and undue influenceCoercionCoercion

The consent of the aggrieved partyThe consent of the aggrieved party

is taken by committing or is taken by committing or threatening to commit an actthreatening to commit an act

forbidden by Indian penal code.forbidden by Indian penal code.

Undue InfluenceUndue Influence

The consent of the aggrieved partyThe consent of the aggrieved party

is obtained by dominating the partyis obtained by dominating the party by taking an unfair advantage of his by taking an unfair advantage of his

position. position.

Physical force is exercisedPhysical force is exercised

Relationship between theRelationship between the promisor promisor

and theand the promisee promisee is not necessaryis not necessary

Moral force is used in undueMoral force is used in undue

influenceinfluence

Some sort of relationship must existSome sort of relationship must exist

between the two parties to the between the two parties to the

contractcontract




3.Fraud3.Fraud

Section 17




Meaning of fraudMeaning of fraud

Misrepresentation of facts may be intentionalMisrepresentation of facts may be intentional

or innocent.or innocent. Intentional misrepresentation hasIntentional misrepresentation has

been termed as been termed as FraudFraud




Examples of fraudExamples of fraud

ManojManoj was induced to buy shares in a company onwas induced to buy shares in a company on

account of a false statement made by a stranger. Itaccount of a false statement made by a stranger. It

was held that he could not get out of the bargainswas held that he could not get out of the bargains

because false statement was not made by the because false statement was not made by thecompany or its agent.company or its agent.

ABHISHEK says to DEEPIKA his coat is made of ABHISHEK says to DEEPIKA his coat is made of

pure wool ,though he knows that it is untrue . pure wool ,though he knows that it is untrue .DeepikaDeepika

purchases the coat believing ABHISHEK¶s statement purchases the coat believing ABHISHEK¶s statement

to be true ,It is a fraud by ABHISHEK and thereforeto be true ,It is a fraud by ABHISHEK and therefore

contract is voidable at DEEPIKA¶s option.contract is voidable at DEEPIKA¶s option.




Mere silence without any legal

Duty to speak will not amount

To fraud except where

(a) The circumstances of the case Are such that regard being

Had to them ,it is the duty of the

Person keeping silence to speak

(b)Silence in itself will be equivalen

To speech

Concealment by mere silence is not fraud




Effect of FraudEffect of Fraud

Section 19=The party whose consent to theSection 19=The party whose consent to the

contract is obtained by fraud can exercised anycontract is obtained by fraud can exercised any

of the following rights:of the following rights:

He may avoid the contract and may (i) ask for He may avoid the contract and may (i) ask for

the damages suffered because of the nonthe damages suffered because of the non

fulfillment of the contractfulfillment of the contract

He may insist for the performance of theHe may insist for the performance of the

contract .contract .




4.Misrepresentation4.Misrepresentation




MisrepresentationMisrepresentation

Misrepresentation is a false representation madeMisrepresentation is a false representation made

innocently without any intention of deceiving theinnocently without any intention of deceiving the

other party .It may include two things:other party .It may include two things:

(a) wrong statement of a(a) wrong statement of a material factmaterial fact not known tonot known to be false be false

(b) Non(b) Non--disclosure of facts where there is a legal dutydisclosure of facts where there is a legal duty

to disclose without intention to deceiveto disclose without intention to deceive

SECTION 18SECTION 18




EFFECT OFEFFECT OF

MISREPRESENTATIONMISREPRESENTATION

Avoid the contract.Avoid the contract.

Rescind the contract within reasonable timeRescind the contract within reasonable time

Can insist for the performance of the contractCan insist for the performance of the contract

Damages in lieu of rescindingD

amages in lieu of rescinding




Difference between fraud andDifference between fraud and

misrepresentationmisrepresentationMisrepresentationMisrepresentation fraudfraud

There is no intention toThere is no intention to

deceive or to gain anydeceive or to gain any

undue advantageundue advantage

In fraud the false statementIn fraud the false statement

is made deliberately with ais made deliberately with a

clear intention of deceivingclear intention of deceiving

the other partythe other party

It makes the other contractIt makes the other contract

only voidable at the optiononly voidable at the optionof the party whose consentof the party whose consent

has been so causedhas been so caused

In fraud the injured partyIn fraud the injured party

besides avoiding the besides avoiding thecontract may also claim thecontract may also claim the

damages.damages.




5.Mistake5.Mistake

Mistake are of two typeMistake are of two type

(a)(a) Mistake of lawMistake of law

(b)(b) Mistake of factMistake of fact




Meaning Of MistakeMeaning Of Mistake

When the consent of the parties is caused byWhen the consent of the parties is caused bymistake, it is not the free consent which ismistake, it is not the free consent which is

needed for the validity of a contract. One, or needed for the validity of a contract. One, or

both, of the parties may be working under both, of the parties may be working under

some misunderstanding or misapprehension of some misunderstanding or misapprehension of

some fact relating to the agreement. If such asome fact relating to the agreement. If such a

misunderstanding or misapprehension had notmisunderstanding or misapprehension had not

been there, probably they would not have been there, probably they would not haveentered into the agreement. Such contracts areentered into the agreement. Such contracts are

said to be have been caused by mistake.said to be have been caused by mistake.




Mistake of lawMistake of law

Mistake of law is further divided into threeMistake of law is further divided into three

categoriescategories

(a) mistake of Indian law(a) mistake of Indian law (b) mistake of foreign law(b) mistake of foreign law




Mistake of factMistake of fact

Bilateral mistakeBilateral mistake

Unilateral mistakeUnilateral mistake




Bilateral mistakeBilateral mistake

Section 20 states that were both the parties to anSection 20 states that were both the parties to anagreement are under a mistake as to a matter of fact,agreement are under a mistake as to a matter of fact,essential to the agreement shall beessential to the agreement shall be void. void. TheThe mistakemistakeshall be termed as bilateral mistake of fact only whenshall be termed as bilateral mistake of fact only when

both of the following conditions are satisfied both of the following conditions are satisfied (a) it should be committed by both the parties(a) it should be committed by both the parties

(b) it should relate to a matter of fact essential to the(b) it should relate to a matter of fact essential to theagreement.agreement.

E.g.E.g.--A agrees to buy certain horse from B .It turns outA agrees to buy certain horse from B .It turns outthat the horse was dead at the time of the agreementthat the horse was dead at the time of the agreement,though neither party was aware about this fact. The,though neither party was aware about this fact. Theagreement is void.agreement is void.




Case of material factCase of material fact

referring to previous slidereferring to previous slide

A and B believing themselves to be marriedA and B believing themselves to be married

,made a separation agreement in which A,made a separation agreement in which A

agree to pay B Rs 10000 .It was later agree to pay B Rs 10000 .It was later

discovered that they were not duly married .Bdiscovered that they were not duly married .B

claimed the promised money .The agreementclaimed the promised money .The agreement

was held to be void as there was mistake of was held to be void as there was mistake of

fact on their part which was material to thefact on their part which was material to theexistence of the agreement.existence of the agreement.




Unilateral mistakeUnilateral mistake

One party to a contract is under a mistake of fact, theOne party to a contract is under a mistake of fact, the

contract is voidable .unilateral mistake do not affectcontract is voidable .unilateral mistake do not affect

the validity of contract unless they concern somethe validity of contract unless they concern some

fundamentalfundamental Example: A agreed to buy certain wheat from BExample: A agreed to buy certain wheat from B

believing that they were old.Infact wheat offered believing that they were old.Infact wheat offered

were new. It was held that A could not avoid thewere new. It was held that A could not avoid the

contract on the ground that he had a mistakencontract on the ground that he had a mistaken

impression as to the oldness of wheat.impression as to the oldness of wheat.




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Free Consent (2)