Free Consent

Introduction

The meaning of Contract according to the Indian Contract Act is an agreement between two parties on acceptance of an offer from one party to the other. A contract is enforceable by law. The main ingredient of a contract is the mutual promise between two parties to perform an act as decided in the agreement. Certain essential conditions have to be taken into consideration by the parties in a contract to make it a valid contract competency of parties, legal object, and free consent are some of the elements that must be taken into consideration to establish a valid contract according to Indian Contract Act 1872.

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This Story also Contains

1. Introduction
2. Meaning of Consent
3. Difference Between Consent and Free Consent
4. What is Free Consent
5. What is the Importance of Free Consent?
6. Advantages and Disadvantages of Free Consent
7. Factors Violating Free Consent
8. Case laws related to Free Consent
9. Conclusion

Among the essential elements of a valid contract, the free Consent of the Parties to a contract is one of the essentials without which a Contract will be void. It is improper for any parties to a contract to sign it under duress or coercion.

Meaning of Consent

A meeting of the minds between the two parties is required for consent, according to Section 13 of the Indian Contract Act, which states that "when two parties enter into the contract they should agree upon the same thing in the same manner." When someone freely accepts another person's offer or desires, that person is exhibiting consent.

A contract involving two or more parties to mutually commit to achieving a goal or any other kind of agreement is called consent. Understanding free consent in business law facilitates comprehension of all the legal guidelines that businesses must go by.

Difference Between Consent and Free Consent

What is Free Consent

Section 13 of the Indian Contract Act stipulates that "when two parties enter into the contract they should agree upon the same thing in the same manner." This means that consent requires a meeting of the minds between the two parties. When someone freely accepts another person's offer or desires, that person is exhibiting consent. When someone voluntarily accepts another person's offer or wish, that person has consented. According to the Indian Contract Act, assent that is free from force, undue influence, fraud, misrepresentation, or error is referred to as free consent.

What is the Importance of Free Consent?

• A free consent protects the basic structure and enforceability of the contract

• Free Consent protects the parties from undue influence, fraud, force, misrepresentation, etc.

• The principles laid down by the doctrine of consensus-ad-idem are taken into consideration.

Advantages and Disadvantages of Free Consent

Factors Violating Free Consent

Section 14 of the Indian Contract Act 1872 deals with free Consent. According to this section, free consent is considered to be free if certain factors do not violate it.

1. Coercion

According to Section 15 of the Indian Contract Act 1872, The act of coercing someone into signing an agreement is defined as either committing or threatening to perform an act prohibited by the Indian Penal Code or unlawfully detaining or threatening to hold any property to the detriment of any person.

Coercion is the act of compelling someone to sign a contract. When coercion is combined with threats or intimidation to obtain a party's consent, that consent is not given voluntarily.

To increase the legitimacy of a threat, coercion may entail the real infliction of bodily and psychological suffering. The threatened individual may then cooperate or obey if more harm is threatened.

How does Coercion affect free consent?

When coercion occurs, the contract becomes voidable. It suggests that the contract is voidable at the option of the party whose consent was not freely given. As a result, the party who feels wronged will choose whether to keep or end the contract.

Techniques used in Coercion

• threatening to do anything that is prohibited by the Indian Penal Code.

• intimidating someone into signing a contract by threatening to hold anything or even detain it without according to the law.

In the case of Chikkam Ammiraju v. Chickam Seshamma

In this instance, the husband coerced his wife and son into signing a release deed in favour of his brother about various properties that the wife and boy had claimed as their own by threatening to commit suicide.

The court determined that the release document was voidable since suicide constituted coercion as defined by section 15 of the Indian Contract Act.

2. Undue Influence

According to Section 16 of the Indian Contract Act 1872, when one of the parties acts dominantly or subverts the other party's wishes with the use of its power. Another thing that can go against free consent is undue influence. It happens when one of the other parties is more dominant than the other in any way. Their strong position over the opposing party gives them the potential to gain an unfair advantage. Manipulation of a person who is weak or reliant on another person is known as undue influence. It happens when someone has the power to influence another person's choice because of their relationship.

How does undue influence affect free consent?

An agreement is voidable at the option of the person whose assent was caused due to the effect of undue influence. Such a contract is subject to set aside. The only person with the ability to avoid or revoke a contract is that party. The third party has no control over this right.

Essential Elements of Undue Influence

The essential elements to constitute undue influence are-

• A relationship between two parties of trust, authority and confidence

• Unfair persuasion: closely review the contract's provisions.

In the case of, Lakshmi Amma v. T. Narayana

In one instance, the patient was confined to a nursing facility due to a multitude of illnesses. There, he executed a deed giving one of his sons exclusive possession of all of his assets. The court determined that the gift could be voidable due to improper influence.

3. Fraud

According to section 17 of the Indian Contract Act 1872, Fraud is defined as the making of false statements, making of any promises with the intent to deceive, or plotting to obtain the upper hand over another individual. It entails making misleading claims about facts, leaving out pledges made during the agreement, acting dishonestly to deceive the opposing party, etc. and numerous more dishonest acts fall with this deception.

A person is not considered to have committed fraud if they remain silent about information that could influence their decision to sign a contract unless the situation calls for them to speak or if their silence is itself the same as speaking.

Essential elements to constitute fraud-

• a statement or portrayal of reality that is made knowing it is untrue or without confidence in its veracity.

• forced the other party to fulfill his demand

• The actor is intended to cause harm or loss.

How does Fraud influence free Consent?

If fraud results in a null and void contract, the party that was duped has the right to withdraw from the agreement and is liable for damages as a result of the fraudulent agreement.

In the case of Ratan Lal Ahluwalia v. Jai Janider parsad

In addition to making the contract voidable at the discretion of the party whose agreement is obtained, fraud gives rise to a claim for damages relating to deception under common law.

4. Misrepresentation

According to section 18 of the Indian Contract Act, of 1872, giving a party a false statement, a phoney depiction of a fact, or supplying unauthorized information in an attempt to deceive the other party. All that constitutes a misrepresentation is presenting false information at the outset of the transaction. Contract misrepresentation occurs when there is a chance that the facts committed at the ground level are not reliable. Negligent deception and innocent misrepresentation are the two categories of misrepresentations that apply here as well.

Fraudulent Misrepresentation

when something has been willfully misrepresented, done carelessly, or without considering it to be true. When someone makes a false representation and they know it is wrong or is careless about whether it is real or false, it is considered fraudulent misrepresentation.

Negligent Misrepresentation

When there is no logical basis for the deception and it is done carelessly, it is deemed a negligent misrepresentation. Negligent misrepresentation can only be shown where the representative owed the representee a responsibility to handle carefully. In this case, a person would only be held responsible if he had deliberately ignored the appointed task. Even in the lack of a fiduciary relationship, there is a duty between the two parties.

Innocent Misrepresentation

If a representation is free of errors and malicious intent and is backed by a reasonable basis for belief, it is deemed to be an innocent misrepresentation. After making an honest mistake, a person has the right to withdraw from a contract they engaged in, but they are not entitled to reimbursement. Contracts are not voidable unless there are good reasons to do so. Proof of innocence in the case of misrepresentation would be enough to establish the fact.

How does misrepresentation affect free consent?

Under the Specific Relief Act of 1963, the party who has suffered as a result of the misrepresentation when entering into a contract may elect to terminate the contract and rescind it within a reasonable amount of time.

5. Mistake

Mistake definitions are not included in the Indian Contract Act. In Sections 20, 21, and 22, the concept of error is discussed. A mistake occurs when two persons unintentionally seek to achieve the same goal. If a material truth that was unknown to both parties at the time of the agreement was misrepresented, the agreement is void. There are two types of mistakes as per the Indian Contract Act of 1872.

Mistake of fact

An error of fact occurs when one or both contractual parties misinterpret a language that is essential to comprehending the terms of the agreement. Such an error could be made as a result of miscommunication, carelessness, omission, etc. Errors are inadvertent oversights that are never deliberate. These errors may be bilateral or unilateral. Mistakes of facts are further divided into-

Bilateral Mistake

According to section 21 of the Indian Contract Act 1872, Bilateral mistakes occur when there is a factual error that affects both parties to a contract and is fundamental to the agreement. Bilateral errors can also occasionally be referred to as common or mutual blunders. Not every party will assent to the same concept or the same item when it comes to permission. Since no consent has been granted, the contract is null and void.

Unilateral Mistake

According to Section 22 of the Indian Contract Act 1872, When only one party to the contract makes a mistake, it is referred to as a unilateral mistake. In this scenario, the contract won't be deemed void. Section 22 of the Act stipulates that a mistake made by one party does not render the contract unenforceable. As a result, the contract is still enforceable even if just one party is at fault.

Mistake of Law

The error may stem from a legal mistake made abroad or it may have something to do with a legal error that occurred in India. The premise is that, when it comes to Indian laws, ignorance of the law is not an adequate defence. This implies that neither party may assert that the other is ignorant of the law.

According to the Contract Act, no party may seek any redress because they are ignorant of Indian law. This will also involve interpreting any legal provisions incorrectly.

Nonetheless, ignorance of foreign law is not treated similarly. There is some wiggle room because the parties are not required to understand the nuances of foreign law. Consequently, an error of foreign law is treated as a factual error under the Indian Contract Act.

In the case of The State of Maharashtra v. Mayer Hans George In this case, A has been issued the order to arrest Y in her capacity as a court officer. Because A believes Z to be Y, he wrongly arrests Z. In this instance, A may defend the mistake by citing his good intentions.

Case laws related to Free Consent

In the case of, Ranganayakama v. Alwar Sethi

The Madras High Court was asked to rule on the legality of a thirteen-year-old child's adoption by his mother, who was a widow. The adoptive son's family would not allow her husband's body to be taken from her home after his death until she had officially adopted the youngster. The Court in this case held that, because the widow was forced into the adoption, it was not legally binding on her.

In the case of, Ayekpam Angahi Singh and another v. Union of India and Ors.

By putting the highest bid, the plaintiff in this case won the fishery auction. The rights in question were put up for sale for three years, with a 40,000 annual rent payment. The plaintiff requested that he be given the impression that the rent was paid for the entire three years. He therefore asserted that he was making the same error. In this instance, the error was unilateral, therefore there was no way to avoid the contract.

Conclusion

For an agreement to be enforceable, free consent is essential. It is impossible to overestimate the importance of free consent. The Party's consent must be given voluntarily and freely. The agreement must be accepted freely, free from duress or deception. Free consent is important as the parties who are into a contract will discharge the promises and obligations by the contract so it is crucial for both parties to enter into a contract with free consent without any fraud, coercion or undue influence.