free consent (2)
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FREE CONSENTFREE CONSENT
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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.
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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
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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)
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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 .
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An example of Coercion
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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.
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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.
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Example of undue influenceExample of undue influence
By operation you just execute a deed of giving your
Whole property to me
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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
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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
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3.Fraud3.Fraud
Section 17
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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
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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.
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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
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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 .
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4.Misrepresentation4.Misrepresentation
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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
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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
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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.
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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
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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.
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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
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Mistake of factMistake of fact
Bilateral mistakeBilateral mistake
Unilateral mistakeUnilateral mistake
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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.
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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.
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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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THANK YOUTHANK YOU
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