Concept of Free Consent

Introduction

For an agreement to be a valid contract, it should meet the requirements of the same under Section 10 of the Indian Contracts Act, 1872. These requirements include free consent of the parties, lawful consideration with a lawful object, and not expressly declared void. According to Section 10[1], “All agreements are contracts if they are made by free consent.” Thus, if an agreement is made without the free consent of the parties, it cannot be a valid contract, and it would be voidable or void.

Meaning of Consent

Section 13[2] states that when two or more persons are said to consent when they agree upon the same thing in the same sense. For example, A agrees to buy a car from B. B owns three cars and wishes to sell his Mercedes. ‘A’ thinks he is buying his Audi car. Here, A and B have not agreed upon the same thing in the same sense of mind or unison of mind.

Meaning and Importance of Free Consent

Mutual free consent is an essential element of an agreement. Unless consensus ad idem between the parties is established, no enforceable contract takes place. There cannot be any agreement unless both the parties agree to it in the same sense of mind. If there is no consent, the agreement is said to be declared void-ab-initio (void from the beginning).

Section 14[3] states that Consent is said to be free when it is not caused by coercion, undue influence, fraud, misrepresentation, and mistake, which will be discussed further. Free consent is an important element to a valid contract, as it protects the validity and enforceability of an agreement between the parties. It provides the parties to withstand their autonomous power to frame their running policy or principles

In the absence of consent, a contract is considered to be void. When there is consent but it is not free, the contact is called to be voidable at the will/option of the aggrieved party.

Elements vitiating Free Consent and their Effects

  1. Coercion

As per Section 15[4], when a person commits or threatens to commit an act which is forbidden under the Indian Penal Code, or detains an object unlawfully or threatens to do so with the intention to force a person to enter into a contract, then it is said to be coercion.

It is upon the party whose consent was allegedly coerced to prove that the consent so obtained from the aggrieved party was through coercion. When consent of a party was obtained through coercion, the contract becomes voidable at the will of the aggrieved party.

Madras High Court upheld that threat to commit suicide also amounts to coercion and the aggrieved party has the right to pull out of the contract[5]. In the present case, the husband threatened his wife and son that he shall commit suicide if they did not execute a sale deed in favour of his younger brother. They executed the deed but later filed a plea of coercion later. Since the very act of committing suicide is forbidden under the IPC[6], the act of the husband was found to be illegal and the consent so obtained was found to be obtained through Coercion.

  1. Undue Influence

When a contract is made between two parties and one of them is in a position to dominate the will of the other and uses that position to obtain an unfair advantage over the other, then the contract is said to be made out of undue influence. These instances include, where one party has an actual or implied authority over the other party, when one party has a relationship based on trust (fiduciary relationship), or when one party enters into a contract with another of unsound mind.

When the situation is such that the consent is obtained through undue influence, the contract becomes voidable on the option of the aggrieved party, according to Section 19A[7]. As per Section 16(2) of the Indian Contracts Act, a person is said to have a dominant position when a person is involved in a relationship involving trust and has real authority, or when the person is involved in a contract with a person whose mental capacity is permanently or temporarily affected due to age, illness or mental or bodily distress.

A mother was alleged to use undue influence on her adopted son when he reached the age of majority to ratify the gift deeds regarding the non-watan property made to her daughters and caused obstruction in letting him consult his natural father. The court held that the adoptive mother used her position of authority to dominate his son to gain an unfair advantage in getting his gift deeds ratified. Also, As the adoptive son was unaware of his legal rights, the matter was set aside.[8]

  1. Fraud

Fraud is a fallacious representation of facts presented with the ill intent of cheating the other party. Fraud is proved when false representation has been made knowingly, or without belief in its truth, or recklessly whether or not true. As per Section 17[9], a fraud is when one party convinces another party into an agreement by:

  1. Suggesting a false fact to be true
  2. Actively concealing facts while having the complete knowledge of such facts
  3. Making a promise without any intention of performing it.
  4. Performing any other such act with the intention to cheat.
  5. When the court finds an act to be fraudulent.

In accordance with Section 17(1), to constitute fraud, there should be a false statement of fact. To express an opinion does not constitute fraud. Just being silent about elements that can affect the willingness of a person to enter into a contract does not amount to fraud, but if there is a duty to speak upon the person who is keeping silent, then it becomes a fraud. Examples of such cases are contracts of utmost good faith where full disclosure is expected.

In cases of fraud, it is upon the party who alleges fraud to prove it. The party has to prove the circumstances that can lead to the existence of fraud. Merely mentioning fraud while pleading is not enough. A crucial point of consideration is that if the party who has been the alleged victim of fraud had the opportunity or means to find out the truth with ordinary care, then the contract is not held to be void.

A father called his illegitimate son as “son” for the purpose of fixing his marriage. It was held that the father knowingly hid the legitimacy of the son with the intention of cheating the parents of the bride which amounts to fraud.[10]

  1. Misrepresentation

In accordance with section 18[11], misrepresentation can be divided into three types –

  1. When a statement of fact is made which is false but is believed to be true.
  2. When the person making the false statement performs breach of duty, and by doing so gains unjust advantage even though such wasn’t the intention of the party.
  3. When one contracting party behaves in an innocent manner which leads the other party to commit mistake(s) with regards to the contents of the contract.

The common point between the three types is that misrepresentation is understood to be an innocent mistake done without the intention to do so. The burden of proof lies on the party alleging misrepresentation to avoid the contract to prove that misrepresentation was used to obtain the consent. When consent was obtained through misrepresentation, it becomes voidable at the option of the aggrieved party.

The plaintiff purchased two blocks of land from the defendant to practise sheep farming. During negotiations, the defendant said that if the place was worked properly, it would carry 2,000 sheep. The plaintiff bought the place believing that it would carry 2,000 sheep. Both parties were aware that the defendant had not carried on sheep-farming on the land. In an action for misrepresentation, the trial judge said that in the case, the statement of the defendant regarding the carrying capacity of the land could not be taken as anything but a mere expression of opinion and not a fact since both parties were aware that the defendant did not practise sheep farming. The Privy Council concurred with the view of the trial court and held that in the absence of fraud, the purchaser does not have the right to rescind the contract.[12]

  1. Mistake

a. Mistake of Law

When legal provisions are the subject matter of misunderstanding between contracting parties, it is referred to as Mistake of Law. Now, the party can be confused regarding the law of the homeland or the law of a foreign land. In the cases where any contracting party pleads no knowledge of the laws of the homeland, the contract cannot be avoided for such an excuse is not considered to be valid. However, if the subject matter of confusion is foreign laws, the contracting party can be excused from the contract in the case of a lack of knowledge of such laws.

b. Mistake of Fact

When the subject matter of misapprehension are the clauses or terms of the contract, it is said to be a mistake of fact. The misunderstanding can be on the part of one party or both.

Bilateral Mistake: When a matter of fact is the subject matter of misunderstanding for both the contracting parties, the agreement is said to be void.                          

Unilateral Mistake: When a matter of fact is the subject matter of misunderstanding for one of the contracting parties, the agreement stands to be valid.  Only when the party is mistaken about the parties to agreement or nature of the transaction, the agreement becomes void.

The plaintiff was an illiterate woman who wanted to give her properties to her daughter. The defendants took her thumbprints on two documents which she believed were documents in her daughter’s favour, but the second document was in favour of the defendants who were supposed to only execute the deed. She later filed a suit for the sale deed’s cancellation and it was held that for the woman was clueless about the second document’s nature, it was held to be void.[13]

Where a contract has been reduced to writing, or a deed owing to mutual mistake fails to express the concurrent intentions of the parties at the time of its execution, the court will rectify the written instrument in accordance with true content.[14]

Exceptions

  1. Private rights of Property: A party is thought to be unable to fully know the private rights of the other party, therefore it is excusable.
  2. Mistake as to any foreign law is considered to be treated like a mistake of fact and is considered excusable since knowledge of foreign law is not necessary.

Conclusion

Free consent is absolutely important to make an agreement, a valid and enforceable contract. The importance of free consent cannot be stressed enough. The party’s consent must be free and voluntary. It is necessary to give consent to the contract without any pressure or delusions.

Section 19[15] & 20[16], where it is interpreted to us how important free consent is to a valid contract and without which the contracts can be void or voidable. Hence, the clauses that if one had means to discover the truth and the clause to restore the benefit if decided to void the contract states the fact that law does not allow a party to make a contract to take advantage and later say that there was coercion, fraud, misrepresentation or undue influence.


[1] The Indian Contracts Act, 1872, Act no. 9, Acts of Parliament, 1872.

[2] The Indian Contracts Act, 1872, Act no. 9, Acts of Parliament, 1872.

[3] The Indian Contracts Act, 1872, Act no. 9, Acts of Parliament, 1872.

[4] The Indian Contracts Act, 1872, Act No. 9, Acts of Parliament, 1872.

[5] Chikkam Ammiraju and Ors. v. Chikkam Seshamma and another, (1917) 41 Mad. 33 (India).

[6] The Indian Penal Code, 1860, Act no. 45 of 1860, Acts of Parliament, 1860.

[7] The Indian Contracts Act, 1872, Act No. 9, Acts of Parliament, 1872.

[8] Lingo Bhimrao Naik v. Dattatrya Shripad Jamadagni, (1937) 39 Bom. L.R. 1233 (India).

[9] The Indian Contracts Act, 1872, Act No. 9, Acts of Parliament, 1872.

[10] Bimla Bai v. Shankarlal and Ors., AIR 1959 MP 8 (India).

[11] The Indian Contracts Act, 1872, Act No. 9, Acts of Parliament, 1872.

[12] Bisset v. Wilkinson, (1927) AC 177.

[13] Dulari Devi v. Janardan Singh, AIR 1990 SC 1173 (India).

[14] Sales-Tax Officers v. Kanhaiya Lal, AIR 1959 SC 135 (India).

[15] The Indian Contracts Act, 1872, Act No. 9, Acts of Parliament, 1872.

[16] The Indian Contracts Act, 1872, Act No. 9, Acts of Parliament, 1872.


Authored By: Anuj Goyal, 4th Year, BA LLB, ILS Law College, Pune

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