Free Consent

In the Indian Contract Act, the definition of Consent is given in Section 13, which states that “it is when two or more persons agree upon the same thing and in the same sense”. So the two people must agree to something in the same sense as well. Let’s say for example A agrees to sell his car to B. A owns three cars and wants to sell the Maruti. B thinks he is buying his Honda. Here A and B have not agreed upon the same thing in the same sense. Hence there is no consent and subsequently no contract.

Elements of free consent

  • Consent is considered to be free consent when the following factors are satisfied:
  • It should be free from coercion.
  • The contract should not be done under the pressure of undue influence.
  • The contract should be done without fraud.
  • The contract should not be made through misrepresentation.
  • The contract should not be made by mistake.

Importance of free consent

  • The contract made out of free consent protects the validity and enforceability of an agreement.
  • It provides a protecting shield to the parties from coercion, undue influence, misrepresentation, fraud, and mistake
  • It provides the parties to withstand their autonomous power to frame their running policy or principle.
  • The principle of consensus-ad-idem is followed.

Mistake in the free consent

A mistake is described as an element, which when occurs in a contract makes it void. There are two types of mistakes, which occurs in a contract

Unilateral Mistake

A mistake is said to be unilateral when one party is mistaken in the agreement.

Bilateral Mistake

Mutual mistake

A mistake is said to be mutual when both parties misunderstood each other. Thus it shows that there is a breach in the principle of consensus-ad-idem in the contracts and the contract is to be considered as void.

Illustration, “A” made an offer to “B” to sell his scooter. “A” intended to sell his 3G scooter but “B” believed that “A” would sell his 4G scooter. Thus there was no proper communication and the fact was mistaken. It would amount to an effective agreement.

Common mistake

Section20 of the Indian Contract Act, 1872 lays down the provision for common mistakes. A contract arising out of common mistake is considered to be void. This type of mistake is possessed by both the parties but this mistake is not the result of mutual mistake, it arises individually.

Free consent examples

Illustration 

  1. “A” agrees to sell his land to “B”. “A” has 10 lands in different places and he wanted to sell the land in the west direction but “B” wanted the land in the east part. In this case, it is seen that there is no meeting of minds and the principle of consensus-ad-idem is violated. Thus the agreement would be considered void.
  2. “A” an old man who stays with “B”, his nephew and he takes care of him. “B” demanded to get the property of “A” as he was taking care of him and forces him to sign the papers. In this case, “A” is under undue influence.

Elements Vitiating Free Consent

1] Coercion (Section 15)

Coercion means using force to compel a person to enter into a contract. So force or threats are used to obtain the consent of the party under coercion, i.e it is not free consent. Section 15 of the Act describes coercion as

  • committing or threatening to commit any act forbidden by the law in the IPC.
  • unlawfully detaining or threatening to detain any property with the intention of causing any person to enter into a contract

For example, A threatens to hurt B if he does not sell his house to A for 5 lakh rupees. Here even if B sells the house to A, it will not be a valid contract since B’s consent was obtained by coercion.

Now the effect of coercion is that it makes the contract voidable. This means the contract is voidable at the option of the party whose consent was not free. So the aggravated party will decide whether to perform the contract or to void the contract. So in the above example, if B still wishes, the contract can go ahead.

2] Undue Influence (Section 16)

Section 16 of the Act contains the definition of undue influence. It states that when the relations between the two parties are such that one party is in a position to dominate the other party, and uses such influence to obtain an unfair advantage of the other party it will be undue influence.

The section also further describes how the person can abuse his authority in the following two ways,

  • When a person holds real or even apparent authority over the other person. Or if he is in a fiduciary relationship with the other person
  • He makes a contract with a person whose mental capacity is affected by age, illness or distress. The unsoundness of mind can be temporary or permanent

Say for example A sold his gold watch for only Rs 500/- to his teacher B after his teacher promised him good grades. Here the consent of A (adult) is not freely given, he was under the influence of his teacher.

3] Fraud (Section 17)

Fraud means deceit by one of the parties, i.e. when one of the parties deliberately makes false statements. So the misrepresentation is done with full knowledge that it is not true, or recklessly without checking for the trueness, this is said to be fraudulent. It absolutely impairs free consent.

So according to Section 17,  a fraud is when a party convinces another to enter into an agreement by making statements that are

  • suggesting a fact that is not true, and he does not believe it to be true
  • the active concealment of facts
  • a promise made without any intention of performing it
  • any other such act fitted to deceive

4] Misrepresentation (Section 18)

Misrepresentation is also when a party makes a representation that is false, inaccurate, incorrect, etc. The difference here is the misrepresentation is innocent, i.e. not intentional. The party making the statement believes it to be true. Misrepresentation can be of three types

  • A person makes a positive assertion believing it to be true
  • Any breach of duty gives the person committing it an advantage by misleading another. But the breach of duty is without any intent to deceive
  • when one party causes the other party to make a mistake as to the subject matter of the contract. But this is done innocently and not intentionally.

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