Free Consent: Importance and Essentials Factors: According to section 13 Two persons are said to have consented when they agree upon same thing in the same sense.
In English law, this is called ‘consensus – ad – idem’.
Effect of absence of consent
- When there is no consent at all, the agreement is void – ab – initio’.
It is not enforceable at the option of either party
Example 1:- X have two car one Maruti car and one Honda city car. Y does not know that X has two cars Y offers to buy car at Rs.50,000. Here, there is no identity of mind in respect of the subject matter. Hence there is no consent at all and the agreement is void – ab – inito.
Example 2:- An Illiterate woman signed a gift deed thinking that it was a power of attorney – no consent at all and the agreement was void – ab – inito [ Bala Devi V S. Manumdats ]
Consent is said to be free when it is not caused by [ Section 14]
- coercion [Section 15]
- Undue influence [Section 16]
- Fraud [Section 17]
- Misrepresentation [ Section 18]
- Mistake [Section 20, 21,22]
Effect of absence of Free Consent :- If consent coercion, undue influence, fraud , Misrepresentation the contract is voidable at the option of party whose consent was not free [19, 19A]
To know the difference between Void, Voidable and Valid Contract click here
Coercion [Section 15]
- Committing any act which is forbidden by the IPC
- Threatening to commit any act which is forbidden by the IPC.
- Unlawful detaining of any property or
- Threatening to detain any property.
Essential elements of coercion
Above four points
- coercion need not necessary proceed from party to contract.
- Coercion need not necessary be directed against the other contracting party.
- It is immaterial whether the IPC is or is not in force at the time or at the place where the coercion is employed [Bay of Bengal caption]
Effect of threat to file a suit:- A threat to file a suit (whether civil or court) does not amount to coercion unless the suit is on false charge. Threat to file a suit on false charge is an act forbidden by the IPC and thus will amount to an act of coercion.
Effect of Threat to commit suicide:- Threat to commit suicide amounted to coercion and the release deed was example discussed in class. Therefore voidable. [Chikham Ammiraju v seshama]
Duress V Coercion
- Duress does not include detaining of property or threat to detain property.
- Duress can be employed only by a party to the contract or his agent.
- when coercion is employed to obtain the consent of a party the contract is voidable at the option of the party where consent was obtained by coercion.
A threat to strike by employees in support of their demands is not regarded as coercion. This is because the threat to strike is not an offence under the I.P.C. it is a right given under the Industrial Disputes Act.
Detaining property under mortgage: Detention of property by a mortgage until the payment of loan does not amount to coercion
Undue influence [Section 16]
Meaning of undue influence :- dominating the will of the other person to obtain an unfair advantages over the others.
- where the relation subsisting between the parties must be such that one party is in position to dominate the will of the other.
- The dominant party use his position.
- Obtain an unfair advantage over the other .
Presumption of domination of will:-
|Where he holds a real or apparent authority over the other |
Where he stands in a Trust fiduciary (benefit) relation to the other
Mental Capacity of a person is temporarily or permanent effected by reason of age, illness or mental or bodily distress
|Master and servant, parent and child, Income Tax officer and assesses principal and a Temporary Teacher. |
Trustee and beneficiary spiritual Guru and his disciples, solicitors and clients.
Guardian and wards Relationship between medical attendant and ward.
To know more about Capacity to Contract click here
Example :- A Poor Hindu widow agreed to pay interest at 100% P. a because she need the money to established her right of maintenance. It was held that the lender was in position to dominate the will of widow.
No. Presumption of Domination of will:-
- Landlord and Tenant
- Creditor and Debtor
- Husband and wife (other than Pardanashin)
- Principal and Agent
Effect of undue Influence:-[Section 19A]
When consent to an agreement is caused by undue influence, the contract is voidable at the option of the party whose consent was so caused.
Burden of Proof:- A contract is presumed to be induced by undue influence if the following two condition:-
- A party has the position to dominate the will of the others
- The transaction is unconscionable (unreasonable)
In such a case dominant party is under the burden to prove the undue influence was not employed.
[Unconscionable transactions:- if transaction appears to unreasonable the dominant party to prove that there is no undue influence. ]
- Any other transaction:- weaker party to prove the influence was employed]
Where some transaction is entered into in the ordinary course of business, but due to certain contingencies, one party is able to make the other party agree to certain terms and conditions then it is not undue influence.
Example: A applies to a banker for a loan at a time when there is stringency in the money market. The banker declines to make the loan except at an unusually high rate of interest. A accepts the loan on these terms. This is a transaction in the ordinary course of business, and the contract is not induced by undue influence.
Example: A spiritual guru induced his chela to donate all his property to the ashram and said that in return of it, he will certainly get salvation. The chela did the same. Held, that this is a case, of undue influence so it becomes void.
Contract with Pardanashin woman;-
- Induced by undue influence
- Burden of Proof – Full disclosure is made to pardanashin women
- Pardanashin Women
- Understand the contract
- Receipt of competent independent advice
- Dominant party – full disclosure
- Price was adequate
- Receipt of competent independent advice before entering into contract – weaker party.
Undue influence Vs Coercion
Similarities: – Voidable at the option of aggrieved party:-
|Coercion (15)||Undue Influence (16)|