Essential elements of Free Consent in view of Contract Act

 · 6 mins read

By Kiran Sona Puthan



Introduction

Consent that is freely given is referred to as free consent. According to Section 14 of the Indian Contract Act of 1872, free consent is consent that is not the result of coercion (Section 15), undue influence (Section 16), fraud (Section 17), misrepresentation (Section 18), or mistake (Section 20,21,22). The principle of consensus-ad-idem, which means “meeting of minds,” underpins the concept of free consent. Consensus-ad-idem occurs when two parties agree on the same thing with the same understanding.

Coercion

Coercion’ is that the act of committing, or threatening to commit, any act forbidden by the Indian penal code, or the unlawful detaining, or threatening to detain, any property, to the bias of a person desiring to cause a person to enter an agreement. It is important to remember that the IPC does not have to be applicable in the place where the consent was obtained. The phrase “to the prejudice of any person whatever” is an important part of the law because it means that coercion can be directed against the prejudice of anyone, not just the party to the contract. It is also not required that the coercion be caused solely by the contracting party. Sometimes a third party to the contract can use coercion to obtain consent.Through cases of coercion, the burden of proof falls on the party for whom the consent was coerced. Whenever a party’s approval is given through coercion, the contract becomes voidable at the option of the party to whom the consent was obtained in this manner. Threatening to commit suicide is also coercion, and the party who has been affected by it has the right to reject the contract.



Undue Influence

When the contracting parties’ relationships are such that one party can dominate the will of the other and uses the unfair advantage gained to obtain the other party’s consent, the consent is said to have been obtained by undue influence. The Contract Act of 1872 now includes instances in which one person can exert dominion over the will of another. These are some instances:

  • When one person has real or perceived authority over another.
  • When one party has a fiduciary relationship with another.
  • When one person enters into a contract with another whose mental capacity is temporarily or permanently impaired.

When a party in a position to dominate the will of the other enters into a contract and the contract appears to be unconscionable at first, it is the burden of the party in a position to dominate to demonstrate that consent was not obtained through undue influence.

When a contracting party’s consent is obtained through undue influence, the contract becomes voidable at the option of the party whose consent was obtained.

Fraud

When consent is obtained through deception, it is not said to be free. In such cases, the contract is voidable at the option of the party whose consent was obtained through deception. Furthermore, fraud is a tort for which a claim for damages can be made. The term “fraud” is defined in the Indian Contract Act of 1872. The law defines five acts that constitute fraud when committed either by the party or with his assistance or by his agent with the intent to deceive the other party. These are the acts in question:

  • A suggestion about a false fact made by a party who believes it is false.
  • A party’s active concealment of a fact
  • A promise made with no objective of keeping it.
  • Any other act that has the potential to deceive.
  • Any act or omission that the law expressly declares to be fraudulent.

Silence about facts that may affect a person’s willingness to enter into a contract does not constitute fraud; however, if the person who is keeping silent has a duty to speak, it becomes fraud.

In cases of fraud, the party alleging it bears the burden of proof. The party must demonstrate the circumstances that could lead to the existence of fraud. Simply mentioning fraud in the pleadings is insufficient. The contract will not be void if the party whose consent was obtained through fraud had the opportunity or means to discover the truth with ordinary diligence.

Misrepresentation

Misrepresentation under the Indian Contract Act of 1872 has a broad definition and is classified into three types.

  • The first type occurs when a person makes a statement about a fact that is not true, even though he believes it to be true.
  • The second type occurs when there is a breach of duty by the person making the false statement, and he gains some kind of advantage despite the fact that it was not his intention to deceive the other party.
  • The third type occurs when one party, acting in good faith, causes the other party to make a mistake regarding the subject matter of the agreement.

The three types of misrepresentation all have one thing in common: the intention of the party who misrepresents is not to deceive the other party into entering into the contract. The intention of the party who makes the false statement distinguishes misrepresentation from fraud.

The burden of proof is on the party claiming misrepresentation to avoid the contract to demonstrate that misrepresentation was used to obtain consent. When consent is obtained through misrepresentation, it is voidable at the option of the party who obtained the consent.

Mistake

When one of the party’s consents to the contract due to a misunderstanding, the consent is said to have been given by mistake. The party would not have entered into the agreement if it had not been for the misunderstanding.

A mistake in contract law can be of two types:

  1. Mistake of Law

    Mistake of Law occurs when a party has a misunderstanding about the legal provisions. Now, the party may be confused as to whether the law of the homeland or the law of a foreign land applies. If there is an error in domestic law, the contract cannot be avoided. The party cannot use the excuse of not knowing the laws of his home country. However, if the error is due to a misunderstanding of a foreign country’s law, he may be excused.

  2. Mistake of Fact

    When the parties have a misunderstanding about the subject matter or the terms of the contract, it is referred to as a factual error. The misunderstanding could be on the part of one or both parties.

Conclusion

To make an agreement a valid contract, free consent is required. The significance of free consent cannot be overstated. The consent of the contract’s parties must be free and voluntary. Consent to the contract must be given freely and without undue pressure or delusions. It is critical that the parties’ consent is given freely, as this can affect the contract’s validity. If consent to the agreement was obtained or induced through coercion, undue influence, fraud, misrepresentation, or mistake, the agreement may be void.