Introduction
Consent and free consent often create confusion because of their similarities. However, there is a difference between them as per the Indian Contract Act of 1872. These words are related to contracts. According to that law, the parties’ consent must be required for a legally valid contract. In this way, free consent plays a crucial role in making a valid contract.
Meaning of consent
Consent occurs when both contracting parties mutually agree to a contract with its terms and conditions. A contract becomes void due to a lack of consent. Such consent occurs when two or more people agree on the same thing with a mutual understanding. As we refer to section 13 of the Act, it is mentioned that a party who accepts the offer must take it on the same terms that the offerer offers without any changes or interpretations.
Let’s understand with an example of free consent:
Suppose A is ready to sell out his flat to B. A has two properties, one flat and a house. B thinks he is buying a home from A. In that case, free consent is missing between them. Because both do not agree with the same thing in the same manner, there is no consent between them, which is required for a valid contract.
What is free consent in contract law?
The Indian Contract Act,1872 Section 14 described the definition of free consent. According to that, consent may be known as a free when;
- Such consent is free from Coercion.
- When a Contract is not made under undue Influence.
- When a Contract does not fall under fraud.
- When a Contract is not created by misrepresentation.
- When a Contract is not made by mistake of fact.
All these conditions need to be fulfilled before free consent can be considered.
Let’s understand that with an example:
Suppose A likes B’s house and wants to purchase that. A is offering to sell his house to him. More so, he threatens to have B sell his house to him; otherwise, he can damage that house. Here, in this case, B agrees to sell his house to A because of fear if he declines such an offer, then A may cause harm to his house. Here, B’s consent to sell out his house is not considered free consent because it is caused by undue Influence. Thus, a contract between A and B is not valid in the eyes of the law.
Is a Contract made without free consent valid?
Free consent is an essential part of a legally valid contract that makes the legally binding contract. Suppose that part is missing in the contract, and such an agreement becomes voidable according to the provisions of the Contract Act. If consent is obtained only from one party of the contract, that might be treated as the opinion of one contracting party. And it can never be treated as free consent as per law. In that situation, an agreement is affected by Coercion, undue Influence, cheating, fraud, or misrepresentation. An affected party has a right to make such an agreement voidable.
Factors that violate free consent
Some of the primary reasons that can create a negative effect on the contract and cause violation-free consent that is given below;
Coercion
The India Contract Act of 1872, under section 15, has described the definition of Coercion. Coercion is one kind of threat or force, in contract law, used by one contracting party against another party to agree. If a contract is created under Coercion, it is voidable and can be treated as an opinion of either of the contracting parties. The Coercion is also known as duress.
Let’s see an example to understand Coercion better: Suppose A threatens to harm B If B does not give his shop for rent to him. Because of that reason, B agrees to let out his shop to A. Here, consent from B is obtained by A with Coercion. There is no necessity for that type of Coercion to be performed by the contracting party; it may occur by a stranger who is not a party to the contract.
Essential elements of Coercion that need to be fulfilled
- The threat must be given in clear words.
- The danger is given for an illegal act that should be under the provisions of the Indian Penal Code.
- The danger must be expressed as a reason for the other party to enter the contract.
Here, one thing we should note is that a party who lies about the allegation of Coercion wants to set aside an agreement or try to make it void. They need to prove the Coercion.
Undue Influence
The Indian Contract Act of 1872, Section 16 deals with undue Influence. That section explains when an influence may be considered excessive in the contract. Undue Influence in the contract means when one contracting party is in a position to force someone to agree to gain an unfair advantage. Such a contract is known as being made by undue Influence.
Let’s understand that concept with an example;
Suppose A is the wealthiest person, and many people in the village follow his orders. B has a piece of market-valued land at Rs.10,000/—. If A uses his power or authority and forces B to sell that land to him for Rs.1000/-, that would be counted as undue Influence.
The Effect of Undue Influence
Suppose any contract is made using undue Influence and is treated as voidable because the consent given by the other party is affected under unfair pressure or undue Influence. Such a kind of contract is declared as a set-aside. Only the affected contract’s party is entitled to avoid or escape from that contract; they can not give that right to any third party.
The Burden of Proof in Undue Influence
Suppose any contracting party wants to take action against that party who forced them to enter into the contract on the grounds of undue Influence. In that situation, the effective contracting party has two things that need to be proven according to the provisions of the Indian Contract Act and the Indian Evidence Act.
The first is that the defendant has the dominating authority to force him to enter into a contract. However, the second is that they must use that Influence to gain an unfair advantage.
Fraud
The Indian Contract Act of 1872 Section 17 deals with fraud. Fraud is an act someone does with another person for a misleading or cheating purpose.
Generally, the following terms can be included in fraud;
- Any false statement made without going into depth about the fact, whether true or false, would be counted as fraud.
- Any contracting party hiding some material part of the contract that must be mentioned amounts to fraud.
- Any promise is made without the intention to perform it.
- If any activity is done to cheat on someone.
- Any act which is declared fraudulent by law.
Important Elements of Fraud
Here are some of the essential elements of fraud which we need to know;
- A party or his agent makes the fraud.
- The fraudulent act is done to cheat another party.
- The fraud is made against the party or his agent.
- Due to the fraudulent act, the other party needs to suffer some loss or injury.
Misrepresentation in Contract
Section 18 of the India Contract Act 1872 deals with misrepresentation in a contract. Misrepresentation in the contract means a false or nonexistent statement of fact by the party. It can be any misrepresentation, like an untrue statement regarding the real fact or law.
Let’s understand with an example of misrepresentation in a contract:
Suppose A wants to sell his car to B. He approaches B and says his car is ready to use and has no faults. B genuinely believes the vehicle is ready to use, even though he does not know the car has an engine problem. Now, B buys the vehicle from A after relaying his statement. In that situation, there is a misrepresentation in part A.
What are the effects when misrepresentation comes out?
Some steps can be taken by an affected party when misrepresentation is made against them;
- Affected parties can avoid such a contract or cancel it.
- The affected party can continue such a contract and force the other party to rectify the misrepresentation.
Types of Misrepresentation
Generally, misrepresentations have two kinds, which are given below;
Negligent misrepresentation:
- This misrepresentation happens when the representative needs to gain knowledge of anything or carelessly presents their thing.
- The representee is liable only when he specifically ignored his duty to present the right things properly.
Innocent misrepresentation
- If any presentation is made based on sound reason and malafide intention is not found, that can be called innocent misrepresentation.
- If a party who enters into a contract with an innocent misrepresentation has a right to withdraw it, they are not entitled to claim damage.
- Without proving misrepresentation beyond a reasonable doubt, the contracting party can not make such a contract void. There must be a need to prove it with evidence and facts.
Mistake
Sections 20, 21, and 22 of the Contract Act deal with mistakes. Two types of mistakes are defined: mistakes of law and mistakes of fact.
Mistake of Law
Mistake of law defined under section 22 of the Act, there are some specific categories mentioned for that, which are given below;
Mistake of the law of the country:
There is no excuse if anyone does not know the law. It must be expected that every citizen knows the law. Forgiveness is only accepted if everyone knows or tries to ignore the law.
Mistake of foreign law:
Everyone is expected to know their country’s law, but that rule can not be imposed on the law of another country. A person may not know the laws of other countries. In that situation, if anyone commits a mistake because they do not know the law of the foreign country, that would be excusable and count as a mistake of fact, and the contract made on that basis becomes void.
Mistake of Fact:
Sections 20 and 21 of the Act are related to mistakes. According to that, there are two types of mistakes, which are given below;
Unilateral Mistake
If one contracting party makes a mistake regarding the essential fact, the contract remains valid until that mistake is not the result of fraud or misrepresentation to another contracting party.
Bilateral Mistake
A bilateral mistake is a mistake made by both contracting parties regarding the essential fact of the contract. In that situation, the contract is void.
Conclusion
After discussing those mentioned above, free consent is essential in making an effective and valid contract. According to contract law, such consent must be free from Coercion, Undue Influence, Fraud, Misrepresentation, and Mistake.
Also Read:
What is a Performance Contract?
What is an Unenforceable Contract under the Contract Law?
