In simple terms, Section 13 of the Indian Contract Act of 1872 tackles the idea of “free consent.” It basically says that for a contract to be legit, all parties involved need to be on the same page about what they’re agreeing to. This concept is rooted in the idea of Consensus-ad-idem, meaning a meeting of the minds. If there’s any confusion or misunderstanding, the agreement becomes invalid.
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Definition of Consent
In the Indian Contract Act, the definition of consent is given in Section 14, which states that “it is when two or more persons agree upon the same thing and in the same sense”.
‘A’ agrees to sell his house to ‘B’. ‘A’ owns three houses and wants to sell his house in Haridwar. ‘B’ thinks he is buying his Delhi house. Here ‘A’ and ‘B’ have not agreed upon the same thing in the same sense. Therefore, there is no consent and no contract afterwards.
In the case of Raffles v. Wichelhaus, two parties, ‘A’ and ‘B’, entered into a contract for the sale of 125 cotton bales by a ship named “peerless” from Bombay. There were two ships with the same name, and while Party ‘A’ was thinking of one ship, Party ‘B’ was thinking of the other ship. The court held that there was no meeting of minds by both parties. Hence the contract was invalid.
Difference Between Consent And Free Consent
|When all the parties to a contract agree on the same thing in the same sense or in unison of mind, it is considered to be consent.
|When an agreement is entered into with the consent of the parties, and it is also free from fraud, misrepresentation, undue influence, mistake, and coercion, it is said to be free consent.
|In an agreement, when there is a lack of consent, the contract would be void.
|When in a contract there is a lack of free consent, it is voidable. The voidability of the contract depends on the option of the aggrieved party.
|All the parties to the contract must have the same subject In mind. They should agree on the same thing.
|In the case of free consent, the consent should be free from – fraud, misrepresentation, mistake, undue influence, and coercion.
Mistake in the Free Consent
When a contract is entered into by all the parties by mistake, then it is void. There are other types of mistakes, which are briefly discussed below.
Unilateral Mistake: Imagine you’re in a contract, and oops – someone messes up. That’s a unilateral mistake, my friend. It’s when just one party goofs up.
Bilateral Mistake: Now, picture this: both parties in a contract make a mistake. That’s a bilateral mistake. There are two types – one where both goof up together (mutual mistake) and another where it’s just a common blunder.
Mutual Mistake: Ever been in a situation where you and the other party didn’t quite get each other? Well, if that happens in a contract, it’s called a mutual mistake. And guess what? The contract becomes void.
Common Mistake: Okay, here’s the deal with common mistakes. If one party messes up in a contract, and it affects everyone involved, the contract becomes void. It’s like, “Whoops, my bad!” but with legal consequences.
Examples Of Free Consent
Sita, a homemaker, relies on her husband Ram for financial support. Unfortunately, Ram is pressuring Sita to sign some papers against her will. In this situation, Sita finds herself in a difficult position due to the influence exerted by Ram.
Threatening Force: When someone uses threats to make another person do something or refrain from doing something, intending to compel them to enter a contract, it is termed coercion.
Example Scenario: For instance, if Ram forces Sham to transfer all his money by threatening to kill him, it is considered coercion.
Contract Nullification: Contracts made under coercion can be canceled once it is established that coercion was involved.
Employment Against a Third Party: Coercion can also be employed against a person who is not a party to the contract, extending its impact beyond the immediate parties involved.
Additional Insight: The use of coercion in contracts undermines the voluntary nature of agreements, leading to ethical and legal concerns.
Power Imbalance: Undue influence occurs when one party in a contract holds a higher position and exploits this position to gain unfair advantages.
Affected Parties: Parties susceptible to undue influence include husband and wife, doctor and patient, adult child and parent, lawyer and client, as well as individuals with lower mental capacity or in old age.
Burden of Proof: The aggrieved party must prove the dominating position of the other, demonstrating that unfair advantage was taken.
Equity Principle: Undue influence is rooted in the doctrine of equity, emphasizing fairness and justice in contractual relationships.
Mistake in Transaction with Parda-Nashin Women:
Special Protection: Parda-Nashin women, veiled and secluded, receive special legal protection based on principles of equity and good conscience.
Rationale Behind Laws: Special laws aim to safeguard the interests of Parda-Nashin women due to their vulnerability stemming from factors like illiteracy and susceptibility to external influences.
Burden of Proof: In transactions involving Parda-Nashin women, the burden of proof lies with the person conducting the transaction. They must prove that the woman entered into the contract willingly and without any form of coercion.
Awareness Requirement: The transacting party must demonstrate that the Parda-Nashin woman was fully informed about the terms and conditions during the document exchange.
Humanitarian Consideration: These legal provisions underscore the importance of considering the unique circumstances of individuals, promoting fairness and protection in contractual engagements.
Difference Between Coercion And Undue Influence
Important points that explains the difference between coercion and undue influence is discussed below.
|When a person threatens the other party in a contract or forces them to enter into a contract is said to be coercion.
|When the two parties enter into a contract, and between them, one party is in a higher position to influence the other person is said to have undue influence.
|In case of coercion, a relationship between the parties to a contract is not required.
|But in case of undue influence, the relationship between the parties must exist because they need to show the burden of proof.
|Coercion is a criminal offense.
|But in case of undue influence, it is not a criminal offense.
|Here the person forces another person to enter into an unlawful contract.
|In undue influence, the party in a higher position misuses his authority and dominates the other person to enter into a contract.
Fraud, according to Section 17 of the Indian Contract Act 1872, occurs when one party enters into a contract without any intention to fulfill their duties. This can involve false representation of facts or the intentional concealment of information from the other party.
Features of Fraud:
- If one party fails to carry out an act promised in the contract, it is considered fraudulent.
- Fraud includes presenting false facts to the other party.
- Deliberately hiding information from the other party is also deemed as fraud.
- If a party promises certain activities in the contract but has no genuine intention to perform them, it is considered fraudulent.
Silence in Fraud:
- When it is the duty of a party to speak up, remaining silent is equivalent to fraudulent behavior.
- If a person deliberately stays silent about facts that could mislead the other party during contract negotiations, it constitutes fraud.
Effects of Fraud:
- When fraud occurs in a contract, it renders the contract voidable.
- The party responsible for the fraud is liable to cover any damages resulting from the fraudulent activities in the contract.
- The party who has been deceived by fraud has the right to revoke the contract.
In simple terms, misrepresentation in a contract, as per Section 18 of the Indian Contract Act 1872, means providing false information about the facts involved.
Characteristics of Misrepresentation
- Intent to Deceive: The person making the false representation aims to trick the other party into entering a contract.
- Material Facts: The false statement is not just casual talk but involves crucial facts.
Kinds of Misrepresentation
Negligent Misrepresentation: This happens when someone, without a reasonable basis or due care, provides inaccurate information in a contract. Liability arises if they neglect their promised duties.
Innocent Misrepresentation: When a statement is made based on belief, without negligence or fraudulent intent, it falls under innocent misrepresentation.
Effects of Misrepresentation
- Contract Cancellation: The party deceived by misrepresentation has the option to cancel the contract.
- Claiming Damages: The deceived party can seek compensation from the party responsible for the false representation.
Difference Between Fraud And Misrepresentation
The difference between fraud and misrepresentation are discussed briefly below.
|In case of fraud, stating the facts which are not true and concealing the facts to make the other person enter into a contract is called fraud.
|Misrepresentation means a false representation of the facts in a contract.
|In case of fraud, it is the deliberate intention to deceive the other party in a contract.
|In the case of misrepresentation, it is a Bonafide intention while representing the false facts but believing them to be true. Here there is no intention to deceive the other party in a contract.
|Claim for Damages
|In case of fraud, the aggrieved party has the right to claim damages she has suffered due to fraud.
|In case of misrepresentation, the aggrieved party does not have any kind of right to claim for the damages he has suffered.
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