Friday, 3 June 2022

What is Free Consent

What is Free Consent? 

By Shweta Nair


Section 13 of the Indian Contract Act says, 

Two or more individuals are held to accord when they approve upon the same thing in the same sense. 

In Latin, this is known as Consensus Ad Idem which means Meeting of the Minds. 

Section 14 says, 

Consent is thought to be free when it is not triggered by coercion, undue influence, fraud, misrepresentation or mistake. 

Coercion:

In layman’s terms, coercion means force. 

Section 15 defines coercion as, 

Doing or threatening to do any act forbidden by the IPC, or the unlawful detention or threatening to detain any property belonging to another with an intention of causing any person to enter into an agreement. 

In Bodhisattwa Gautam v. Subhra Chakraborty, as also in Ranganayakamma v. Alwar Setti, it has been held that, threat to commit suicide would also amount to coercion. 

In Amir Raju v. Sheshamma, where the villager refused to allow a widow to set fire to her husband’s funeral pyre until she signs the adoption deed of his illegitimate child. The court held the case to be one of coercion. 

Undue Influence: 

In cases of Undue Influence, the relationship between 2 parties is such that 1 is in a position to dominate the will of other and he uses such position to unduly influence the weaker party to enter into a contract with him, even though actually speaking, the weaker party would not have preferred to do so. 

Section 16 states that, 

A person is said to be in a standing to control the will of another if 

  1. Where the relationship prevailing between the parties are such that one of the parties is in a position to control the will of other and uses that position to attain a biased benefit over the other person. 


Without prejudice to the generality of sub-section 1, a person shall be in a position to dominate the will of other if – 

  • He grasps real or apparent authority upon the other. For example, real authority- boss and employer or teacher and student. And apparent authority- Policeman and person in his custody. 

  • He is in a fiduciary relation with the other.

A fiduciary relationship is one of trust and confidence where one party has to revere to another. For example- parents and children. 


  • He makes a contract with a person whose mental capacity is momentarily or perpetually affected due to age, illness, or mental or bodily distress. 


  • Where a person who is in a position to dominate the will of other enters into a contract and the transaction appears to be ‘unconscionable’. 


Illustration: A lends money to B at an unusually high rate of interest when there is stringency in the money market. This need not be a case of undue influence. 


Fraud: 


Section 17 states that, the following 5 things amounts to fraud: 


  • The recommendation, as to a fact, of that which is not true by one who does not believe it to be true- Suggestio Falsi.

In simple words, this means telling lies in order to enter into a contract. 


  • The active suppression of a fact by one having knowledge or belief of the act - Suppresso Veri

The question which arises here is does mere silence amounts to fraud? The answer is NO. Mere Silence shall only amount to fraud if, 


  1. If there is an obligation to speak 

Illustration: A, the owner of the building is having negotiations with a prospective buyer. A does not lie about the structural stability of his building. However, A does not reveal the fact that he has received 3 demolition notices from the municipal corporation. Here, A’s silence amounts to fraud. 


  1. Where the silence itself amounts to speech. 

Illustration: X is selling his car to Y. Y tells X, “If I can be sure that this car has not met with any major accident, correct.” X keeps mum. The car has actually been in a major accident and had been repaired. X’s silence amounts to fraud. 


  • Making of a promise not intended to be kept. 

  • Any act explicitly avowed fraudulent by law. 

  • Any other act fitted to deceive. 


Misrepresentation: 


Section 18 states that, 


Misrepresentation signifies that the positive declaration of an individual making it, of that which is not true, yet he is believes it to be true. 

Any violation of obligation, which without an intent to betray, gains any benefit to the person causing it, by deceiving another to his prejudice. 


Illustration- A is negotiating sharing his agricultural plot of land to B. When asked about the yield of the land, A mentions of-handedly that the yield is 10 quintals per year. A has not verified this fact and the yield is actually 9.5 quintals. A has committed misrepresentation. 


The chief contrast between fraud and misrepresentation is that- 

In misrepresentation, there is no ‘intent to deceive’. It is an innocent misrepresentation of facts. 

It is also to be noted that in case of fraud and misrepresentation, if the party who is claiming his consent was not free, had an opportunity of verifying the true state of affairs but had carelessly entered into the contract then they cannot claim that their consent was not free. 


Mistake: 


There are various categories of mistake: 


As the legal maxim goes, ‘Ignorantia non curat lex’ which means ignorance of the law is not an excuse. 

Therefore, only a mistake of fact is allowed as an excuse for consent not being free. Mistake of Law is not allowed as an excuse. 

Furthermore, 

Section 20 states that, only a bilateral mistake is permitted that is the mistaken belief has to be on behalf of both the parties to the contract. 

A unilateral mistake (where only one party is mistaken) is no excuse. 


Exception: 

However, in case of mistaken identity, unilateral mistake is allowed as an excuse. 


Case- Said v. Butt and Blenkran v. Blenkran and Co. 


The contract will be ‘void’ in case of mistake and will be ‘voidable’ in coercion, fraud, misrepresentation and undue influence. 








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