FREE CONSENT

LEARNING OUTCOME

To analyse
the situations under
which the consent is not
free

Consent Defined:
When two or more persons agree upon
the same thing in the same sense, they are
said to consent. (consensus ad idem)
OR
An act of assenting to an offer
Case :
Bala devi v. S.Majumdar
(deed of gift to nephew- given to
manage lands)

Free Consent
According to section 14,
Consent is said to be free when it is
not caused by:
Coercion
Undue Influence
Fraud
Misrepresentation
Mistake

(I) Coercion
(fear, physical compulsion, menace to
goods)

(i) Committing or threatening to commit any act

forbidden by Indian Penal Code

Case : Ranganayakamma v. Alwar Shetty (1889)

(young girl- adoption)
(ii) the unlawful detaining, or threatening to detain,
any property
Case : Muthta v. Muthu Karappa
(agent detained books of accounts)

Effect of Coercion (Section 19):

Agreement is voidable at the option of
the aggrieved party.
A person to whom money has been paid,
or anything delivered under coercion must
repay or return it.
Example :
railway company-illegal charge to
consignee

Coercion may be directed against

anybody:
Example:
A threatens to kill B (Cs son) if C does
not let out his house to A.
Is this agreement is caused by coercion.

(II) Undue influence :

A contract is said to be induced by undue influence where the relations
subsisting between the parties are such that one of the parties is in a
position to dominate the will of the other and uses that position to
obtain an unfair advantage over the other.
Undue influence when presumed:
(a)Real or apparent authority
(master-servant, doctor patient)
(b) Fiduciary relationship (case : Mannu singh v. Umadat Pandey)
(father-son, solicitor-client)
(c) Mental Distress/ mental capacity affected by age, illness etc.(e.g
Aged patient-overcharged)
(medical attendant-patient)

Effect of Undue Influence :

Agreement is voidable at the option of the
aggrieved party.
Court may set aside the case
or
Implement it in the modified form
(e.g bond of Rs.100 signed for Rs.200)
To return the benefit if contract is set aside

02/07/16

You just execute a gift

deed of your whole
property to me and Ill
operate you

Case: Moody v. Cox

A solicitor sold one of his property to
one of his clients. The client
subsequently alleged that the
property was considerably
overvalued and his consent was
caused by undue influence.
Is it so????

Case: Ranee Annapurni v.

Swaminatha
A poor Hindu widow who was in dire
need of money , was forced by
money lender to agree to pay 100%
rate of interest.

Coercion v. Undue
Influence

Coercion
Commit or threat to
commit an offence
Physical in character
(fear, physical
influence, menace to
goods)
Intention to cause a
person to enter in an
agreement.
Criminal act

Undue Influence
One dominates the
position of another
Moral
influence/character
influence used to
obtain unfair
advantage of the
another.
No criminal act

 Representation
A statement of fact which one party
makes in the course of negotiations with a
view to inducing the other party to enter
into a contract is representation.
It can be :
(a) Innocent
(b) Intentional

(III) Misrepresentation
It is a false statement which the
person making it honestly believes it
to be true
OR
Which he doesnt know to be false
e.g. Unsound mare

For misrepresentation to exist there

must be:

(a) A false representation of a fact

(b) Misrepresentation made without the
knowledge of its falsity
(c) Misrepresentation made without the
intention of cheating the other party
(d) The misrepresentation must have
been acted upon by the parties.

The representation must relate to

material fact
Bisset vs Wilkinson
The vendor of a piece of land told a
prospective purchaser that, in his
opinion the land would carry 2000
sheep. In fact the land could carry
only a number less than this.

Held there was no misrepresentation

as the statement was one of opinion
which was honestly held.

Consequences of
Misrepresentation
(1)May avoid or rescind the contract.
(2) May affirm the contract and insist
upon the misrepresentation being
made good.

FRAUD
Section 17

02/07/16

(IV) Fraud
Fraud means and includes any of the following acts
done with an intent to deceive or to induce a
person to enter into a contract:
(i)Any false suggestion or statement
(ii) Active concealment of fact by one having
knowledge or belief of the fact
(iii) A promise made without any intention of
performing it.
(iv) Any such act or omission as the law specially
declares to be fraudulent.
(e.g playing with financial records)

???
A sells by auction, to B , a horse which
A knows to be unsound. A says nothing
to B about horses unsoundness. Is it a
fraud ??
B is As daughter and has just come of
age. Is is a fraud now ?
B says to A , If you do not deny it, I
shall assume that the horse is sound.
A says nothing.Is it a fraud now ??

For fraud to exist there must be:

(a) False Representation of a fact
(b) Misrepresentation made with a
knowledge of its falsity
(d) Misrepresentation made with the
intention of inducing the other party
(Peek v. Gurney)
(e)The other party must have suffered
some loss

Effect of Fraud
(1) May avoid or rescind the contract.
(2)May affirm the contract and insist
upon the misrepresentation being
made good
(3) Claim for damages

MISTAKE
(i) Mistake of Law:
(a) Mistake of law of country
(b) Mistake of law of a foreign country
(ii) Mistake of Fact:
(a) Bilateral mistake
(b) Unilateral mistake

(A)Bilateral Mistake:
Contract is void
Two conditions:
(i)Mistake should be mutual
(ii)Must relate to matter of fact essential
to an agreement
Note : but erroneous opinion about
something is not a mistake (e.g
painting )

Cases of bilateral mistake (be

brief)
(A)Mistake as to the existence of
subject-matter
e.g dead horse

(B) Mistake as to identity of the

subject-matter

e.g Henkel v.Pape

cargo of cotton to arrive expeerless from Bombay

(C) Mistake as to title to the

subject-matter
e.G lease owned already

(D) Mistake as to quantity of

subject-matter

(E) Mistake as to quality of the

subject-matter
Example:
A and B entered into the contract for
top-class quality basmati rice but
mistaken together for the quality.
The contract was held to be void.

(B) Mistake as to the possibility of

performance of contract
(i)Physical impossibility (procession of
king)
(ii) Legal impossibility

2. Unilateral mistake: Contract is

not void

2. Unilateral mistake:
(case is void)