INTRODUCTION: Unless two or more persons agree on the same thing in the same sense with respect to a contract especially sale and purchase the parties are said to enter into a contract with consent. If the contract is vitiated by Coercion, Undue influence, fraud, misrepresentation and mistake as to a matter of fact essential to the contract etc the contract is said to be breached by the erring party who is guilty of the breach leading to legal remedies unless there is a contract to the contrary.
Two or more person are said to consent wen they agree upon th
e same thing in thesame sense.
- “Free consent” defined –
Consent is said to be free when it is not caused by –
(1) coercion, as define
d in section 15, or
(2) undue influence, as defined in section 16, or
(3) fraud, as defined in section 17, or
(4) misrepresentation, as
defined in section 18, or
(5) mistake, subject to the provisions of section 20,21, and 22.
Consent is said to be so caused when
it would not have been given but for the
existence of such coercion, undue influence, fraud, misrepresentation, or mistake.
- “Coercion” defined
“Coercion” is the committing, or threating to commit, any act forbidden by the Indian
Penal Code (45 of 1860) or the unlawful de
taining, or threatening to detain, any
property, to the prejudice of any person wh
atever, with the inte
ntion of causing any
person to enter into an agreement.
- “Undue influence” defined
(1) A contract is said to be induced by
“under influence” where the relations
subsisting between the parties
are such that one of the pa
rties is in a position to
dominate the will of the other and uses that position to obtain an unfair advantage
over the other.
(2) In particular and without
prejudice to the generally of
the foregoing principle, a
person is deemed to be in a position to dominate the will of another –
(a) where he hold a real or apparent author
ity over the other, or where he stands in
a fiduciary relation to the other; or
(b) where he makes a contract with a pers
on whose mental capacity is temporarily
or permanently affected by re
ason of age, illness, or
mental or bodily distress.
(3) Where a person who is in a position to dominate the will of another, enters into a
contract with him, and the tr
ansaction appears, on the face of it or on the evidence
adduced, to be unconscionable, the burden
of proving that such contract was not
induced by undue influence shall be upon th
e person in a position to dominate the
will of the other.
Nothing in the sub-section shall affect th
e provisions of section 111 of the Indian
Evidence Act, 1872 (1 of 1872)
- “fraud defined
“Fraud” means and includes
any of the following acts committed by a party to a
contract, or with his connivance, or by his agents, with intent to deceive another
party thereto his agent, or to indu
ce him to enter into the contract;
(1) the suggestion as a fact, of that which
is not true, by one who does not believe it
to be true;
(2) the active concealment of a fact by one having knowledge or belief of the fact;
(3) a promise made without any
intention of performing it;
(4) any other act fitted to deceive;
(5) any such act or omission as the law specially declares to be fraudulent.
- “Misrepresentation” defined
“Misrepresentation” means and includes –
(1) the positive assertion, in a manner
not warranted by the information of the
person making it, of that whichis not true, though he believes it to be true;
(2) any breach of duty which, without an
intent to deceive, gains an advantage to
the person committing it, or anyone claiming under him; by misleading another to
his prejudice, or to the prejudice
of any one claiming under him;
(3) causing, however innocently, a party to
an agreement, to make a mistake as to
the substance of the
thing which is subjec
t of the agreement.
- Voidability of agreements without free consent
When consent to an agreement is caused
by coercion, fraud or
the agreement is a contract voidable at th
e option of the party whose consent was so
caused. A party to contract, whose consent
was caused by fraud or mispresentation,
may, if he thinks fit, insist that the contra
ct shall be performed,
and that he shall be
put on the position in which he would have been if the representations made had
Exception : If such consent was caused by mi
srepreentation or by
within the meaning of section 17, the contract, neverthless, is not voidable, if the
party whose consent was so caused had th
e means of discovering the truth with
Explanation : A fraud or misrepresentation which did not cause the consent to a
contract of the party on whom such fr
aud was practised, or to whom such
misrepresentation was made, does
not render a contract voidable.
19-A. Power to set aside contract induced by undue influence –
to an agreement is caused by undue influe
nce, the agreement is a contract voidable
at the option of the party
whose consent was so caused.
Any such contract may be set aside either absolutely or, if the party who was entitled
to avoid it has received any benefit there
under, upon such terms and conditions as
to the Court may seem just.
- Agreement void where both parties
are under mistake as to matter of
Explanation : An erroneous opinion as to the value of the things which forms the
subject-matter of the agreem
ent,is not be deemed a mistake as to a matter of fact.
- Effect of mistake as to law
A contract is not voidable because it was ca
used by a mistake as to any law in force
in India; but mistake as to a law not in force in India has the same effect as a
mistake of fact.
Conclusion: the draftsmen in their wisdom had almost exhaustively provided the above five breaches and the the related remedies therefrom such as Coercion, Undue influence, fraud, Misrepresentation and mistake Among the first 4 breaches Coercion, undue influence, frauds, Misrepresentation. Are voidable at the option of the wronged party to approach court or other forum for relief against the guilty party for Rescission, damages, injunction etc Mistake which may b e of the following forms
1) Mistake as to the identity of the parties
2) Mistake Identity and Nature of the subject of the matter of the contract
3) Nature and content of the promise itself.
The above three kinds of mistakes are void, means have absolutely no legal sanctity and parties would be put in same place prior to entering into void contract. If any consideration has been poassed on quantum meruit basis the benefited party/parties must return that benefit before rescinding the contract.
I once again reiterate that unless there is consensus ad idem, as all the parties or two parties to a contract agree on the same thing in the same sense the contract is vitiated by free consent. Without the protection provided under Section 14,125,16,17,21 in the form of coercion, undue influence, fraud, misrepresentation and Mistake wronged contracting parties would’ve been rudderless and remediless.
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