The Indian contract act defines meaning of free consent. Further it provides some situation where a consent is not considered to be free. What is free consent? What these situations are. How they impact a contract? Lets have a clarity on all these questions.
As we know, “an agreement means an accepted offer”. So for an agreement, we just don’t need to offer but we also need acceptance which must be free too. This free acceptance or free consent, what it means. Why it is necessary? Let’s understand.
Free consent means when consent is given by understanding all terms of the agreement in the same sense in which it was offered and where consent was not caused by fraud or misrepresentation or any undue (in-genuine) pressure.
Further, any consent will be considered as free when it is not affected by coercion, undue influence, fraud or misrepresentation. Now, what is the meaning of these words? Let’s understand meaning of all these words so you will have a better idea that what actually a free consent is?
- Coercion (section 15)
- Undue Influence (section 16)
- Fraud (section 17)
- Misrepresentation (section 18)
Let’s understand each term one by one.
Coercion defined under section 15 of the Indian contract Act 1872 as
“Coercion’ is the 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 whatever, with the intention of causing any person to enter into an agreement.”
In simple words, coercion is mostly concerned with forcing someone by doing or threatening to do something wrong against that person. This threatening or force can be used to threaten any party of the contract or any other third person to get consent directly or indirectly.
For example, Mohan threatened Ram’s wife to kill her daughter if Ram doesn’t sell his land to him. Here Mohan threatened Ram’s wife who is not a direct party to contract but will affect Ram’s consent indirectly.
- Undue Influence (Meaning of Free Consent)
Section 16 defines undue influence as
““A contract is said to be induced by ‘undue influence’ where the relations subsisting between the parties are such that one of the parties is in a position to dominate the will of the other and he uses that position to obtain an unfair advantage over the other”.
In undue influence, one party will always have a dominating position over other party and by using such position or relation, he forces other person to create a contract.
For Example Sohan, the boss of Ram, threaten Ram to sell his Car to him, otherwise he will fire him. Here Sohan is in dominating position, which he is using to force Ram to make a contract with him. Thus this will be called undue influence.
In simple words, fraud is an action aimed to deceive any person to take advantage by getting consent on contract. The fraud can be done in the following manner
- Telling wrong facts
- Concealment (hiding) of fact
- Making promise where no intention to fulfil it
- Any other act to deceive any person or any other act declared fraudulent by law
Here the main point of fraud is that the person has a clear intention to deceive other person.
Example. Ram promised Shyam to sell a land for 5 lakhs telling it as his own land but in reality that land doesn’t own by Ram. Trusting Ram, Shyam agreed to take that land and paid 50000 as advance. Here Ram made a fraud with Shyam by telling him the wrong fact that land owned by him. Here we can say that consent was induced by fraud.
Misrepresentation = Mis (wrong) + representation (of Fact)
Means when a person tells a fact to another person which he believes to be true but in actual the fact is wrong, then this will be considered as misrepresentation.
In misrepresentation, the person has no intention to deceive other person like fraud.
Here the person telling the wrong fact himself believes that the fact is true.
Ram made a contract with Shyam to sell his ancestor’s house to him. Shyam agreed to buy the property and paid 50000 advance to Ram. Later Ram found that the house was destructed by storm last year. Here Ram had no intention to deceive Shyam. He also believed that the house is in good condition. This will be called a case of Misrepresentation.
Legal Consequences when consent was not free?
Section 19 provides the consequences where a consent was affected by coercion, undue influence, fraud or misrepresentation. Here two situations can be arises
- Voidable at the option of one party
- When consent was affected by coercion, fraud, undue influence or misrepresentation, the status of contract can be decided by the person whose consent was affected.
- Means that person (whose consent was affected) can cancel the contract or can also bound the other person to perform the contract. This option is known as voidable at the option of one party.
- Not Voidable
The person who has given the consent will not have the option to make contract voidable means he cannot deny from the contract when
a. His consent was not affected by the coercion, undue influence, fraud or misrepresentation used against him or
b. In the case of misrepresentation or silence, the person could discover the truth by using ordinary diligence.
Ram threatened his wife to sign divorce papers unaware of the fact that his wife already signed the papers. Here the threatening didn’t affect the consent. So in this case Ram’s wife cannot deny from the contract by claiming that the consent was taken forcefully.
Raj made a contract to sell his watch to Shyam which was slightly broken from the back. Raj didn’t tell this fact to Shyam. Here if Shyam buys the watch, he cannot demand to make the contract voidable on the ground that fact was concealed. Here Ram could discover the fact by checking the watch while buying.
Here we have seen how a consent will not considered to be free in a contract. Further law gives some power to the aggrieved party to make the contract voidable except where the person has not taken due care while contracting.