FREE CONSENT

1. FREE CONSENT An agreement is valid only when it is the result of the "free consent" of all the parties to it. Consent involves a union ofthe wills and an according the minds of the parties. This section lays down that consent is not free. If it is caused by A) coercion B) undue influence, C) fraud, D) misrepresentation, or E) mistake A. Coercion: Coercion is the committing or threatening to unlawful any act forbidden by the Indian Penal Code, or unlawful detaining or threatening to detain, any propertyto the prejudice of any person whatever with the intention of causing any person to enter into an agreement. EX: PThreatens to shoot Q if he does not let out his house to P, and agrees to do so. The agreement has been brought about by coercion Features: 1. Coercion means (i) committing or threatening to commit an act; forbidden by the Penal Code, or (ii ) the unlawful, detaining or threatening to detain any property

2. 2. the act, constituting coercion, must be directed at a person and not necessary at the other -party to the agreement 3. The act, constituting coercion, must have been done or threatened with the intention of causing any person to enter into an agreement. 4. It goes not matter whether the Indian Penal Code is or is not in force into place were the coercion is employed. B. Undue Influence: A contract is said to be induced by undue influence where (i) one of the parties is in a position to dominate the will of the other and (ii) he uses the position to obtain an unfair advantage over the other. Undue influence may be pre­sumed to exist in the following cases: 1. Where one partyholdsa real or apparent authority over the other or where he stands in a fiduciary relationship to the other. Fiduciary relationship means a relationship of mutual trust and confidence such a relationship is suppose to exist in the cases such as father and Son; guardian and ward; solicitor and client; doctor and patient; preceptor and disciple; trustee and beneficiary etc. Ex: F having advanced money to his son B during his minority, upon B's coming of age obtains by misuse of parental influence, a bond from B for a greater amount than the sum advanced. F employs undue influence.

3. 2. Where a party makes a contract with a person whose 'mental capacity is temporarily or permanently affected by reason of age, illness or mental or bodily distress. C. Misrepresentation: Representation is a statement or assertion, made by one party to the other, before or at the time of the contract, regarding some fact relating to it. Misrepresentation arises when the representation made is inaccurate but the inaccuracy is not due to any desire to defraud the other party. There is no intention to deceive the Contract Act classifies cases of misrep­resentation into three groups as follows: 1. Unwarranted Assertion "The positive assertion, in a manner not warranted by the information of the person making it, of that which is not true, though he believes it to be true.' Ex: A says to B who intends to purchase A's land: "My land produces 12 maunds of rice per bigha. A believes the statement to be true although he did not have sufficient grounds for the belief. Later on it transpires that the land does not produce 12 maunds of rice. This is misrepresentation. 2. Breach of Duty "Any breach of duty which, without an intent to deceive gains an advantage to the persons committing it or anyone claiming under him; by misleading another to his prejudice or to the prejudice of anyone claiming under him” under this heading would fall cases where a party is under a duty to disclose certain facts and do not do so and thereby misleads the other party.

4. 3. innocent Mistake • "causing, however innocently, a party to an agreement to make a mistake as to the substance of the thing which is the subject of the agreement." • D. Fraud: • The term "fraud" includes all acts committed by a person with a view- to deceive another person. The following acts constitute fraud: • 1. False Statement • The suggestion as to a fact, of that which is not true by one who does not believe it to be true. A false statement intentionally made is fraud. • 2: Active Concealment • "The active Concealment of a fact by one having knowledge or belief of the fact:" Mere non-disclosure is not -fraud where the party is not under any duty todisclose all facts but active concealment is fraud. • Ex: A sells by auction to B a horse which A knows to be unsound-A says nothing to B about the horses unsoundness. This is not fraud because A is under no duty to disclose the fact to B. But if between B and A there is a fiduciary relationship (for example if B is A's daughter) there arises the duty to disclose and non-disclosure amounts to fraud • 3. Intentional non-performance • A promise made without any intention of performing it. Ex: purchase of goods without any intention paying for them • 4.Deception • "Any other act. fitted to deceive."

5. 5.Fraudulent act or omission • Any such act or omission as the law, specially declares to be fraudulent. This clause to provisions in certain Acts which make it obligatory to disclose relevant facts. Thus, under Section 55 of Transfer of Property Act, the seller of immovable property is bound to disclose to the buyer all material defects. , Failure to do- so -amount to fraud. • E. Mistake: • Mistake may be defined as an erroneous belief concerning -something. 'Consent cannot be said to be' "free" when an agreement is entered into under a mistake. An agreement is valid as a contract only when the parties agree upon the same thing in the same sense. • Mistake may be- Bilateral- or Unilateral. Mistakes may be i) mistake of law and ii) mistake of fact. • Rules: • The Contract Act lays down the following rules regarding mistakes • 1. Mistake of Law • Mistake on a point of law does not affect the contract; Mistake on a point of law in force in a foreign country is to be treated as mistake of fact. • Ex: A and B make a contract grounded on the erroneous belief that a particular debt is barred by the Indian law of limitation. This is a valid contract. The reason is that every man is presumed to know the law of his own country and if he does not he must suffer the consequences of such lack of knowledge ,But if in the above case, the mistake is related to the law of a limitation of a foreign country, the agreement could have been avoided

6. 2. Mistake of fact An agreement induced by a mistake of fact is void provided the following conditions are fulfilled. Both the parties of the agreement are mistaken. The mistake is as to a fact, essential to the agreement. Ex: M agrees to buy from N a certain horse. It turns out that the horse was dead at the time of the bargain though neither party was aware of the fact. The agreement is void.