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Free Consent
Business Law
October 19, 2015

Table of Contents
Section 1 Meaning of Consent and Free Consent

Introduction and Definition

Section 2 Brief Discussion on Essentials of Free Consent

Coercion

Undue Influence

Fraud

Misrepresentation

Mistake

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Section 1 Meaning of Consent and

Free Consent

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Introduction and Definition

What is Consent?
According to Section 13 of Contract Act, two or more persons are said to consent when
they agree upon the same thing in the same sense.
This means that there should be perfect identity of mind (consensus ad-idem) regarding
the subject matter of the contract.
What is Free Consent?
To make a contract valid not only consent is necessary but the consent should also be free.
Section 14 of Contract Act says the consent is said to be free when it is not caused by any
of the following :
a. Coercion sec 15
b. Undue influence sec 16
c. Fraud sec 17
d. Misrepresentation sec 18
e. Mistake sec 20,21,22
A contract without free consent may turn into voidable contract.
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Section 2 Brief Discussion on

Essentials of Free Consent

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Coercion
What is it?

Coercion is 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
prejudice of any person, whatsoever with the intention of causing any person to enter
into an agreement.

Examples:

X threatens to kill Y if the latter (Y) does not agree to sell his diamond ring for
Rs. 2500. ( Threat to kill is forbidden by IPC )

Mr. A executes a transfer bond for the house under fear of assault. It will be a contract
voidable at the option of Mr. A since his consent was obtained by coercion.

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Undue Influence
What is it?

Section16, Undue influence is the improper use of any power possessed over the mind
of the contracting party. According to section 16 a contract is said to be affected by
undue influence when:
1.

The relations subsisting between the parties are such that one of the parties is in a
position to dominate the will of other.

2. Uses that position to obtain an unfair advantage over the other.

Person is deemed to be in position to dominate the will of another Where a person
holds a real or apparent authority over the other:
a. Relationship between Master & servant , Moneylender & borrower , Police officer &
accused , Income tax officer & assesee etc.
b. When a person stands in a fiduciary relation to the other: A relationship of trust &
confidence Father & son, Advocate & client, Doctor & patient
c. When a persons mental capacity is temporarily or permanently affected due to
advance age or mental or bodily illness.

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Undue Influence
Difference between coercion and undue influence :
COERCION
1. Threat of an offence
2. Physical character
3. Intention to enter into a contract
4. Criminal act is involved

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UNDUE INFLUENCE
1. Dominate the will of other
2. Moral character
3. Intention to take a unfair advantage
4. No criminal act is involved

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Fraud
What is it?

According to section 17 fraud means and includes any of the following acts committed
by a party to a contract or by any one with his connivance or by his agent with intent to
deceive another party thereto or his agent or to induce him to enter into contract:(a) A
suggestion as to fact of that which is not true by one who does not believe it to be
true(b) An active concealment of a fact by one having knowledge or belief of the fact.
(c) Any other act fitted to deceive(d) A promise made without any intention of
performing it

When any person makes to another a statement which he does not himself believes to
be true to induce the latter to enter into the contract, he commits a fraud.

Intentional misrepresentation amounts to fraud

Example:

X says to Y that his coat is made of pure wool, though he knows that it is untrue. Y
purchases the coat believing Xs statement true. It is a fraud by X and contract is
voidable.

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Misrepresentation
What is it?

Misrepresentation is a false representation made innocently without any intention of

deceiving the other party. It may include two things.
(a) wrong statement of a material fact not known to be false
(b) Non-disclosure of facts where there is a legal duty to disclose without intention to
deceive

Example:

Unwarranted positive assertion X says to Y who intends to purchase his land that it
produces 50 quintals of wheat per acre. X believes the statement to be true, although
he did not have sufficient grounds for the belief. Later on, it was found that land
produces only 30 quintals of wheat per acre.

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Mistake
What is it?

When the parties do not agree on the same thing in the same sense because of some
misunderstanding, it is known as Mistake.

It may be of two kinds

1. Mistake of law : of the country, of foreign law
2. Mistake of fact: bilateral and unilateral

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Thank You

2015 Debjani De All rights reserved. In this document and should not be used as a
substitute for consultation with professional advisors.