Explain Free Consent according to the Indian Contract Act.

Question: Explain “Free Consent” according to the Indian Contract Act. [HJS 2000]

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Answer

In India, all agreements are contracts if they are made by the free consent of parties competent to contract, for a lawful consideration and with a lawful object, and are not expressly declared to be void by law. Two or more persons are said to consent when they agree upon the same thing in the same sense.

A party to a contract is regarded as having consented if by his conduct he has led the other party to believe that he has understood the contract in a particular way and he is estopped from denying it.

Parties must be ad idem:

It is essential for the formation of a contract that the parties must be ad idem. Parties are said to consent when they not only agree upon the same thing but also agree upon that thing in the same sense, on all the essential terms of the transaction, i.e., if their minds are in tandem with the act of the agreeing. Sometimes, there may be an apparent agreement though parties may not be ad idem. In such situations, there is no agreement.

Consent is free when it is not caused by:

1. Coercion: Coercion is the committing of or threatening to commit any act forbidden by the Indian Penal Code 1860, or the unlawful detaining or threatening to detain any property with the intention of compelling any person to enter into a contract. An act or threat forbidden by the Indian Penal Code 1860, would amount to coercion even if it is done in an area where the Code is not in force. A contract obtained by coercion is voidable at the option of the party whose consent is so caused.
2. Undue influence: 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
   • Such position is used to obtain an unfair advantage over the other. Both the conditions have to be established by the person seeking to avoid the transaction.
3. Fraud: Means when the terms which are presented by one party in front of the other party are to cause damage, with the ill- will and to gain advantage out of it. Presenting the false statement, hiding any fact, fake promises made without the intention to perform such act, act done to deceive the other party- such acts will constitute fraud if done with the intention to doing it so.
4. Misrepresentation: It involves presenting the false representation of facts without the wrong intentions or to deceive the other party. In misrepresentation, the party is innocent and has done the act without knowing it. The contract is voidable at the option of the party who was induced by misrepresentation to enter into a contract. He can elect to rescind the contract, or to seek enforcement of representation, and insist upon being placed in the same position as if the contract were performed
5. Mistake: Where both the parties to an agreement are under a mistake as to a matter of fact essential to the agreement is void. In order to render an agreement void for a mistake, both the parties should be labouring under the same mistake of fact. Where one party knows the facts but refrains from communicating the same to the other party, an agreement is not void. A mistake may be shared or common mistake, or a mutual mistake.

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. It must be established that the effect is the direct outcome of that particular cause. Thus where the undue influence or coercion was not instrumental in making the party to do the act in question, the existence of such factor was of no avail.

The person who wishes to avoid a contract for lack of free consent must set up one of the five vitiating elements; a general averment that consent was not free is not enough. A contract cannot be set aside for lack of free consent because it is unfair or unconscionable.

Inadequacy of consideration:

Although inadequacy of consideration does not establish a lack of free consent, it may also be a factor in determining whether consent was free. An agreement to which the consent of the promisor is freely given is not void merely because the consideration is inadequate, but the inadequacy of the consideration must be taken into account by the court in determining the question of whether the consent of the promisor was freely given. Inadequacy of consideration taken cumulatively with other factors may form the basis of a decision not to grant specific performance as observed in Sen Mukherjee & Co v. Chhaya Banerjee [AIR 1998 Cal 252].

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Law of Contract Mains Questions Series: Important Questions for Judiciary, APO & University Exams

1. Law of Contract Mains Questions Series Part-I
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8. Law of Contract Mains Questions Series Part-VIII
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