Consent of Parties in a Contract

A contract will be valid only when it is entered into by the parties having their free consent. Consent is free when it’s not induced by coercion, undue influence, fraud, mistake or misrepresentation.

To understand more clearly the concept of free consent, let us take an example. Let’s assume there are two parties to a contract, ‘A’ and ‘B’. ‘A’ threatens ‘B’ to hurt him if he does not sell his house to ‘A’. Here, the contract is not valid as the consent of ‘B’ is obtained by coercion.

There are various factors which affect the free consent of parties and render the contract as voidable. Some of the factors which affect the consent of the parties are:-

  • Coercion

Section 15 of the Indian Contracts Act, 1872 defines the word coercion. Coercion is when a person is forced to enter into a contract. In coercion, force or threat is used to obtain the consent of the party.

Section 15 of the Act describes coercion as-

  • Committing or threatening to commit any act which is prohibited by law under the Indian Penal Code, 1860.
  • Unlawful detaining or threatening to detain any property which is intended to enter into the contract.

When a contract is entered because of coercion, it leads to the cancellation of the entire contract.

  • Undue Influence

Section 16 of the Indian Contract Act, 1872 defines the word undue influence. Under undue influence, the relationship of the parties is such that one party is in dominating position than the other party and the dominating party uses their position to gain an unfair advantage from the other party.

Example- ‘A’ gives his watch to his teacher ‘B’, who promised to give goods marks to ‘A’ in return of the watch. Later, ‘B’ does not do so. Here the contract is voidable as it is induced by undue influence.

Doctrine of equity is the principle behind undue influence. Undue influence renders the contract voidable.

Undue influence is seen in relation between following parties-

  • Husband and wife
  • Landlord and tenant
  • Trustee and beneficiary
  • Doctor and patient
  • Lawyer and client
  • Parent and child
  • Teacher and student
  • Fraud

Section 17 of the Indian Contract Act, 1872 defines the word fraud. Fraud is caused in a contract when one party intentionally makes a false statement. The remedy for fraud is that the deceived party can render the whole contract as cancelled or claim the damages incurred.

When a party commits any of the following acts, it is fraud-

  • Active concealment of a fact by one, having knowledge of belief of fact
  • Promise made with an intention of not doing it
  • Any act fitted to deceive
  • An act or omission as to law specially declared to be fraudulent
  • Suggestion to a fact which is not true by one who believes it to be true.
  • Misrepresentation

Section 18 of the Indian Contract Act, 1872 defines the word misrepresentation. Misrepresentation is similar to fraud as it includes something which is represented wrongly by the party. However, the only difference between fraud and misrepresentation is that misrepresentation is not done intentionally.

The party making the wrong statement believes it to be true or lacks sufficient or reasonable grounds to see if it is wrong information.

  • Mistake

Section 20 of the Indian Contract Act, 1872 defines the term mistake. When the parties to an agreement are under a mistake of fact which is essential for the contract, the agreement stands void. However, the mistake must be a matter of fact and not of law.

Aishwarya Says:

I have always been against Glorifying Over Work and therefore, in the year 2021, I have decided to launch this campaign “Balancing Life”and talk about this wrong practice, that we have been following since last few years. I will be talking to and interviewing around 1 lakh people in the coming 2021 and publish their interview regarding their opinion on glamourising Over Work.

If you are interested in participating in the same, do let me know.

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