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CONSENT
AGREE
According to section 13 two or more persons are said
To consent when they agree upon the same thing in the
same sense.
CONSENSUS AD IDEM
is not caused by
Coercion
Undue influence
Fraud
Misrepresentation
Mistake
According
Essentials of coercion
Committing any act forbidden by I.P.C
e.g. A, after injuring Bs left hand made him to sign a
promissory note for Rs.50,000 in his favour. The consent
obtained by committing an act (injuring) is forbidden by the
I.P.C.
Threatening to commit any act forbidden by the I.P.C
Eg A Hindu gentlemen died , (having enormous property)
leaving his young wife. The relatives of the deceased
threatened the widow that they would not allow to remove
the dead body for cremation unless she adopted a boy to her
husband. The widow signed the adoption papers. Held,
threat amounted to coercion and consent was not free
(Ranganayaamma vs Alwar Setti (1889) 13 MAD 214)
Unlawful detaining / threatening to detain of any property :when the consent is obtained by unlawful detaining of any
property the consent is said to be caused by coercion.
e.g. An agent refused to hand over the account books and other
documents relating to the agency business to the new agent unless
the principal released him from all his past acts. Consequently
principal gave him a release deed. Held the release was obtained
under the threat of unlawful detaining of property and amounted to
coercion and was voidable at the option of the principal
e.g. A gave beating to B to take revenge for his insult. The beating
does not amount to coercion as the intention of beating was not to
cause him to enter into a contract.
Coercion may proceed either from the party or from a
stranger :Coercion may be applied by the party to the contract himself or by
any other person i.e stranger to the contract.
Coercion may be directed against the party or any other person
The place of coercion is immaterial
Threat to sue
Statutory compulsions
Threat to strike
Detaining property under mortgage
Effects of coercion
Voidable contract
Restitution
BURDEN OF PROOF
The burden of proving that the consent was obtained by
coercion, lies upon the person who wants to avoid the
contract on the ground of coercion. He will have to prove
that he would never have entered into the contract if the
coercion had not been directed against him.
Duress
Synonym of coercion
But it consists in actual violence or threat of violence to a
person with a view to obtaining his consent.
And it focuses against the individual person only and not
property.
UNDUE INFLUENCE
It is an abuse of the position by a person who is in a
position to dominate the will of the other so as to deprive
the latter of free will. Thus when a dominant party
misuses his influence to dominate the will of the weaker
party, to get unfair advantage, in a contract, the contract
is said to be influenced by undue influence.
Unconscionable Transactions
When a dominant party to a contract misuses his position and takes
so much unfair advantage in the contact over the other out of the
miseries or ignorance of the other party, the contract is said to be
unconscionable. The terms and conditions of such a contract are
oppressive and grossly unfair to the weaker party under the
circumstance of the contract. The court refuses to enforce such
contracts.
Cases in which the contracts have been found unconscionable
generally involve transactions of money lending and gifts. (High
rate of interest and High prices)
Fraud
Fraud includes the following act: The suggestion, as to a fact, of that which is not true, by
Elements of fraud
1. The parties committing fraud a fraud may be committed by (a)
party to the contract; or (b) any other person with his connivance; or (c)
his agent. A fraud committed by a stranger to the contract does not
amount to fraud. Hence, it does not vitiate the validity of the contract.
E.g. the directors of a company issued a prospectus containing some
false statements. On the faith of the prospectus A applied for some
shares in the company. The shares were allotted but A wanted to avoid
the contract.
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2. The fraudulent acts; There are five classes of acts considered to be fraud:-
3. Intention to deceive or
induce: Any fraudulent act of a party will amount to fraud only
when it is committed with an intention to deceive the
other party or to induce him to enter into a contract.
Eg. A intending to deceive B, falsely represents that 500
tons of indigo are made annually at As factory and thereby,
induces B to buy the factory. The representation is made
with an intention to deceive. Hence it is fraudulent act.
SILENCE AS FRAUD
Mere silence as to facts likely to affect the
willingness of a person to enter into a contract is
no fraud, unless the circumstances of the case
are such that, regard being had to them, it is the
duty of the person keeping silence to speak, or
unless his silence is, in itself, equivalent to
speech.
I. Duty to speak
Contracts of uberrimae fidei, or utmost good faith in such types
SILENCE EQUIVALENT TO
SPEECH
Sometimes keeping silence may also give an impression of
the existence of a certain fact. In such a case silence, is in
itself equivalent to speech.
Consequences
Contract voidable
Insisting for performance
Restitution
Claim for damages
Exceptions
In following cases the contract is not voidable or contract
Misrepresentation
Any innocent or unintentional false statement
or assertion of the fact made by one party to
the other during the course of negotiation of a
contract is called misrepresentation. The party
making the statement honestly believes in it to
be true and is made in honest ignorance of its
falsehood.
Sec 18
The positive assertion, in a manner not warranted by the
information of the person making it, of that which is not
true, though he believes it to be true
Any breach of duty which without an intent to deceive
Causing however innocently, a party to an agreement , to
make a mistake
Effects
Contract voidable
Insisting for the performance
Restitution
V. Mistake
Mistake is a misconception or misimpression or
misunderstanding or erroneous belief about something.
Do not affect the validity of a contract.
Mistake of Law and Mistake of fact
I. Mistake of law
a. Mistake of the land
The effect of mistake as to law f the country is clearly expressed
Ignorance of law is no excuse
IGNORANTIA JURIS NON EXCUSAT
Section 21 states that a contract is not voidable because it was caused
a mistake as to any law in force in India. The contract will have the
same effect as if parties had full knowledge of the law of the country.
A and B enter into a contract on the erroneous belief that a particular
debt is barred by Indian Law of Limitations. The contract is not
voidable.