What are the terms consent, free consent, coercion, undue influence, fraud and misrepresentation?

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Consent

When two or more persons agree upon same thing and in same sense, it is consent.

If a contract to be valid the consent of parties should be genuine. Consensus-ad-idem principle followed by parties in contract. Parties should have same understanding on subject matter in contract. Mere consent is not enough, free consent is necessary for a contract to be enforceable. Factors which invalidate consent are coercion, undue influence, fraud and misrepresentation

Free consent

If consent is not caused by a) coercion (section 15), b) undue influence (section 16), c) fraud (section 17), d) misrepresentation (section 18) or mistake (sections 20, 21, 22).

According to Indian contracts Act free consent is “consent that is free from coercion, under influence, fraud, misrepresentation or mistake.”

Coercion, undue influence, fraud and misrepresentation or mistake are absent in free consent. If the above mentioned factors affect the consent, then a question arises whether consent is given in voluntary or not. Objective of free consent is to ensure that parties’ judgement in entering contract was not clouded. If the consent is given with above factors (like coercion, undue influence, fraud and misrepresentation or mistake) then potential of contract is invalidate.

Coercion

Committing or threatening to do any forbidden act by IPC 45 (Indian penal code) of 1860 or any unlawful detaining or threatening to do any property, to prejudice of any, with intention of causing any person to enter in to agreement.

Undue influence

When one party is dominating another and uses its position to obtain unfair advantage over another. Instances provided by Indian Contract Act 1872 are

  • Person has real/apparent authority over other

  • Person has fiduciary relationship with other

  • Person enters contract with person affected with mental capacity either permanently/temporarily

Fraud

It is an act committed by a part to a contract/with his connivance/by their agent with intention to deceive other party or its competitors. Act may be

  • Suggests as a fact (which is not true).

  • Active concealment (belief of fact).

  • Promise made with no intention to do it.

  • Act fitted to deceive.

  • Omission of law (which declares as fraudulent).

Misrepresentation

Without any intention to deceive one person/party breach duty to gain advantage to the person committing it.

According to Indian Contract Act 1872, misrepresentation is defined as follows −

  • Statement made by person about fact is not true though that person believes its true

  • Duty breach of a person who is making false statement and gains some kind of advantage but that person has no intention to deceive party

  • One party acts innocently and other party makes mistake with regards to subject matter of agreement.

raja
Updated on 18-May-2022 10:23:24

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