1 / 32

Free Consent

Free Consent. Introduction:.

viet
Download Presentation

Free Consent

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Free Consent

  2. Introduction: • Consent of the parties is necessary to constitute an agreement, which must be free. Free consent means that parties must have given their consent on their own without any pressure of any type. Free consent of all the parties to a contract is one of the essential elements of a valid contract as per requirement of Section -10.

  3. CONSENT DEFINED: • Two or more persons are said to consent when they agree upon the same thing in the same sense.(Section-13). It means that there is no contract if the parties have not agreed upon the same thing in the same sense.

  4. Example: • An illiterate woman executed a deed under the impression, that she was executing a deed authorising her nephew to manage her land, while infact it was a deed of gift in favour of her nephew. The evidence showed that the woman never intended to execute such a deed of gift nor was the deed read or explained to her. It was held that the deed was void and inoperative.

  5. Free Consent: Free consent is the consent which has been obtained by the free will of the parties out of their own accord. According to Section-14, consent is said to be free when it is not caused by- Coercion ,or Undue influence ,or Fraud, or Mis-representation, or Mistake

  6. Coercion : • Section-15 of the Indian Contract Act defines coercion as the committing or threatening to commit any act forbidden by the Indian Penal Code or an unlawful detaining or threatening to detain, any property to the prejudice of any person with the intention of inducing any person to enter into an agreement.

  7. “A girl of 13, lost her husband &her husband’s relatives refused to have the husband’s corpse removed unless she adopted one child of their choice. It was held that the adoption was not binding on her as her consent under coercion within the meaning of Section 15 since any person who obstructed a dead body from being removed would be guilty of an offence under Section 297 of the Indian Penal Code. RANGANAYAKAMMA V. ALWAR [1889]

  8. Duress • Coercion in India is known as duress in England. If the consent of the other party to a contract is obtained under fear caused by threats of bodily harm, it is known as the use of duress. The scope of the term coercion is wider than the term duress.

  9. Distinction B/W Coercion & Duress • Coercion may be directed even against a third party. • Coercion may be aimed against the person or property of another. • Immediate violence is not necessary in case of coercion. • Duress must be aimed against the life of the contra-cting party, his party or children. • Duress must be aimed against the life or liberty of the person. • Duress must be such as to cause immediate violence.

  10. Undue of influence • Section 16 of the Indian contract act provides that , ”a contract is said to be induced by undue influence where the relation subsisting between the parties are such that one of the parties is in position to dominates will of other and use the position to obtain an unfair advantages over the other.”

  11. Essentials of influences • The relationship between the contracting parties in such that one of the parties is in a position to dominate the will of the other party. • The dominate party has used his dominating position to enter into contract and • The dominate party has obtained unfair advantage using his dominating position. Example : A, a police officer purchased a property worth Rs. 2 lakhs for Rs. 20000 from B, an accused under his custody. But later n B wants to cancel the sale on the ground of undue influences. It was held that A, the police officer is in a position to dominate the will of B and existence of undue influence can be presumed.

  12. FRAUD • The term fraud includes all acts committed by a person with an intention to deceive another person. • Fraud is the wilful representation made by a party to a contract with the intent to deceive the other party or to induce such party to enter into a contract. It mean a false statement made knowingly or without belief in its truth .

  13. According to section 17 fraud means and includes any of the following acts done with intent to decieve or to induce a person to enter into contract:

  14. ELEMENTS OF FRAUD • The fraud must have been committed by a party to the contract or with is connivance or by is agent. Fraud by a stranger to a contract does not affect its validity. • There must be anyone of the above mentioned ingredients in act of fraud . • The act of fraud must have been committed with intent to deceive and must actually deceive .No cause of action arises where there is fraud without damage. • The representation must have been aimed at the other party to the contract or with the view to induce the other party to enter into the contract .Such representation must have been made before the conclusion of the contract. • The other party must have suffered a loss.

  15. MERE SILENCE IS NOT FRAUD A party to the contract is under no obligation to disclose the whole truth to the other party “CAVEAT EMPTOR” that is let the purchaser beware is the rule applicable to contract. Example H sold to W some pigs which were to his knowledge suffering from fever. The pigs were sold with all faults and H did not disclose the fact of fever to W. Held there was no fraud.

  16. SILENCE IS FRAUD • Where the circumstances of the case are such that it is the duty of the person observing silence to speak. Following contract come within this category:

  17. 2.Where the silence itself is equivalent to speech Example A says to B “If you do not deny it , I shall assume that the horse is sound.’’ A says nothing. So his silence amount to speech. In case of fraudulent silence, contract is not voidable if the party whose consent was so obtained had the means of discovering the truth with ordinary diligence.(Exception to section 19) Two more exceptions • HALF TRUTH • CHANGE OF CIRCUMSTANCES

  18. EFFECT OF FRAUD • A party whose consent to an agreement was caused by fraud has two remedies namely: • He may rescind the contract • He may insist that the contract shall be performed and that he shall be put in the position in which he would have been, if the representation made had been true. Example : A fraudulently informs B that A estate is free from encumbrance. B thereupon buys the estate. The estate is subject to a mortgage. B may avoid the contract or may insist on its being carried out & the mortgage debt repaid by A.

  19. MISREPRESENTATION The word “representation” means a statement of fact made by one party to the other before or at time contract is made with regard to some past event which materially induces the formation of the agreement. A wrong representation when made innocently is MISREPRESENTATION The leading case on this point is: DERRY V. PEEK (1889)

  20. According to section 18 of the Indian contract act, misrepresentation means and includes: • 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. Positive assertion means an absolute, full and clear statement of a fact. • Any breach of duty, which, without an intent to deceive gains an advantage to the person committing it or anyone claiming under him by misleading another to his prejudice or to the prejudice of anyone claiming under him. This is known as constructive fraud. • Causing, however, innocently a party to an agreement to make a mistake as to the substance of a thing which is the subject of the agreement. The mistake must have been such that there difference between the thing obtained and the thing bargained.

  21. Essential requirement of Misrepresentation • There should be a representation or assertion. • Such representation must relate to a matter of fact which has become untrue. • It was made before the finalisation of transaction with a view to induce the other party to enter into a contract. • It must actually have been acted upon by the party. • It must have been made either by the party himself or by his duly authorised agent.

  22. Consequences of misrepresentation When a misrepresentation has been made, the aggrieved party has the following alternative courses open to him. • He may avoid or rescind the contract. • He may affirm thee contract and insist on the misrepresentation being made good. • He may rely upon the misrepresentation, as a defence to an action on the contract. When the consent is induced by misrepresentation and the aggrieved party has the means of discovering the truth with ordinary diligence, the contract cannot be set aside.

  23. DIFFERENCE BETWEEN MISREPRESENTATION AND FRAUD

  24. WHAT IS MISTAKE ? • MISTAKEMAY BE DEFINED AS AN ERRONEOUS BELIEF CONCERNING SOMETHING . IT MEANS THAT PARTIES INTENDING TO DO ONE THING HAVE BY INTENTIONAL ERROR DONE SOMETHING ELSE.

  25. TYPES OF MISTAKE

  26. MISTAKE OF LAW • MISTAKE OF LAW MAY BE OF THREE KINDS. • MISTAKE OF GENERAL LAW OF THE COUNTRY: THE CONTRACT IS BINDING BECAUSE EVERYBODY IS SUPPOSED TO KNOW THE LAW OF THE COUNTRY. • EXAMPLE: A and B MAKE A CONTRACT UNDER THE IMPRESSION THAT A PARTICULARDEBT IS BARRED BY LAW OF LIMITATION . THE CONTRACT IS VALID. • MISTAKE OF FOREIGN LAW AND PRIVATE RIGHTS OF A PARTY RELATING TO PROPERTY AND GOODS ETC.ARE TREATED AS MISTAKE OF FACT.

  27. MISTAKE OF FACT • MISTAKE OF FACT MAY BE EITHER BILATERAL • MISTAKE OF ONLY ONE PARTY I.E. UNILATERAL MISTAKE.

  28. BILATERAL MISTAKE SECTION 20 PROVIDES THAT “WHERE BOTH THE PARTIES TO AN AGREEMENT ARE UNDER A MISTAKE AS TO A MATTER OF FACTS ,ESSENTIAL TO THE AGREEMENT , THE AGREEMENT IS VOID”. FOUR CONDITIONS MUST BE FULFILLED BEFORE A CONTRACT CAN BE AVOIDED ON THE GROUND OF MISTAKE. • THERE MUST BE A MISTAKE AS TO THE FORMATION OF CONTRACT. • THE MISTAKE MUST BE OF BOTH THE PARTIES; I.E. BILATERAL AND NOT UNILATERAL. • IT MUST BE A MISTAKE OF FACT AND NOT OF LAW. • IT MUST BE ABOUT A FACT ESSENTIAL TO THE AGREEMENT .

  29. CASES FALLING UNDER BILATERAL MISTAKES ARE ….. MISTAKE AS TO THE SUBJECT MATTER • EXISTENCE • IDENTITY • TITLE • PRICE • QUANTITY • QUALITY

  30. MISTAKE AS TO THE POSSIBILITY OF PERFORMING THE CONTRACT • PHYSICAL IMPOSSIBILITY:- A CONTRACT FOR THE HIRING OF A ROOM • FOR WITNESSING THE CORONATION PROCESSION WAS HELD TO VOID BECAUSE UNKNOWN TO THE PARTIES THE PROCESSION HAD ALREADY BEEN CANCELLED. • LEGAL IMPOSSIBILITY:- AN AGREEMENT IS VOID IF IT PROVIDES THAT • SOMETHING SHOULD BE DONE WHICH CANNOT LEGALLY BE DONE.

  31. FOLLOWING CASES EVEN THOUGH THE MISTAKE IS UNILATERAL, THE AGREEMENT WOULD BE VOID. • MISTAKE AS TO NATURE OF THE CONTRACT.. • MITAKE AS TO THE IDENTITY OF THE PERSON CONTRACTED WITH.

More Related