Agreement in which consent is not free

What is free consent?

A key part of a good deal is free consent. But how does the law figure out if two people have clearly and freely signed a contract? A contract can only be enforced if all the parties agree to it, which is also known as agreement ad idem.

As per Section 13 of the Indian Contract Act, 1872, two or more people are in agreement when they all agree on the same thing. This is also known as “consensus ad idem.” This means that both sides must agree on what the deal is about. If someone agrees to a contract under force or even by mistake, the law will not uphold it.

When consent is thought to be “not free”

Even if both sides to a contract agree on the same thing in a broad sense, consent alone is not enough to make the contract legal. Consent must also be free.

It is impossible to have a contract without permission, so the deal is null and void.

In situations where there is permission but not free consent, the party whose free consent was not taken can choose to get out of the deal.

Article 14 of the Indian Contract Act of 1872 says that agreement is free if it is not caused by

A. Coercion—as detailed in Section 15

B. Undue Influence -as defined in Section 16

C. Fraud, as shown in Section 17

D. Misrepresentation, as discussed in Section 18; or

E. Mistake—as long as section 20, 21, and 22 are followed

If consent is made in any of the four situations listed above, the contract is null and void, and the person who is unhappy can choose to have it enforced (section 19 of the Indian Contract Act, 1872).

If either party gives their permission because they were wrong about something, the contract is null and void.

For this reason, both sides must freely agree to the terms of the contract in order for it to be legal.

We’ll look at these five aspects of free agreement in more detail below:

1. Coercion—as detailed in Section 15

Section 15 of the Indian Contracts Act, 1872 defines force as:

Having done or threatened to do something that is against the Indian Penal code.

It is illegal to threaten someone or keep their property without permission, which hurts someone.

-With the goal of getting the other person to agree to something.

It does not matter, though, whether the Indian Penal Code is in effect or not where the force is used.

In this example, Party A uses illegal threats to get Party B to agree to something while they are both on an English ship at sea. Afterward, A sues B in Mumbai for breaking the deal they made. Even though this is not against the law in England and section 506 of the Indian Penal Code wasn’t in effect at the time, A is said to have used force.

Anyone can use pressure, whether they are a party to the contract or not, and they can aim it at either a party to the contract or a stranger to the contract. The only thing that matters is that the person using coercion wants to get someone to sign a contract.

Section 72 of the Indian Contract Act, 1872 says that,

• If someone gives something or money to someone else under fear of force, that person must repay or return the item to its original owner.
• One of its customers was told that a moving company would not send some agreed-upon goods unless they paid an illegal service fee for them. This customer paid the fee to get the things, but he can get the money back from the company for the illegal fee that he paid.
• The person who wants to get out of the contract (i.e., the person whose free permission has not been taken in order to sign a contract) has to prove their case.

The threat to kill oneself

Chikkam Ammiraju and Others v. Chikkam Seshamma and Others (1917)

In this case, a man told his wife and son that he would kill themselves if they didn’t let go of a sale added in favor of his younger brother. They went through with the deal, but later they filed a charge of threat. Being suicidal is against the law according to the Indian Penal Code of 1860.

Held that making a promise to kill oneself is also an act of force, and the person who is threatened with it can back out of the contract.

1. Undue Influence -as defined in Section 16

Section 16 of the Indian Contracts Act, 1872 says that undue influence happens when one party has the power to control the other party’s will and uses that power to get an unfair edge over the other party.

Because of this, any kind of influence that stops someone from making their own free and informed decision is called excessive influence.

Section 16(2) says that someone has a strong position when:

1. There is trust between them and he really does have power over them.
2. He made a deal with someone whose mental ability is temporarily or forever impaired because of old age, illness, or emotional or physical pain.

As an example, An old, sick man is persuaded by B to have him take care of him medically. B asks A for an excessive amount of money to pay for medical care. It is said that B had too much power over A.

Important things for the court to think about when dealing with undue influence

1. If the deal is something a good person would sign or not.
2. If the person had the right mental state to know what he was doing.
3. Whether the situation called for legal help or not.
4. If the person giving the gift did so on their own volition and not because of pressure from others.

Lingo Bhimrao Naik Vs. Dattatrya Shripad Jamadagni

According to the case, the mother of an adopted son was accused of putting too much pressure on her son to agree, when he turned 18, to the gift titles her girls received for non-Watan property, without letting him talk to his biological father.

Held: The adopted mother used her power to force her son to sign the gift documents, and the son did not know what his legal rights were. As a result, the court threw out the case.

1. Fraud, as shown in Section 17

You can’t say that consent is free if it was won through fraud. To trick someone, fraud means giving them fake information about the facts. When a fake statement is made, fraud has been proven.

1. With knowledge
2. Having no faith in its truth
3. Have no care if it’s true or not

Section 17 says that a fraud happens when one person gets another person to sign a deal by

1. Making a claim about a fact that isn’t true or that he doesn’t think is true.
2. Actively hiding facts even though you know them.
3. A promise that is made without any plans to keep it.
4. Doing any other act like this with the purpose to trick someone.

5.When the court thinks the act was dishonest.

This part (17(1)) says that there must be a false statement of fact for it to be theft. Just saying what you think won’t be considered fraud.

For example:

A man who is over the age of 60 and can’t get insurance says he is 50 years old in order to get insurance. This is the same as theft, so the insurance company can refuse to pay out on the contract.

Just being quiet is not fraud

Section 17 makes it very clear that being quiet does not count as theft. But actively hiding facts means making an effort to hide the truth. This is why silence that amounts to actively hiding facts is lying.

A father in Bimla Bai vs. Shankarlal (AIR 1959) called his son who wasn’t his real son “Son” when he set up his marriage. It was decided that the father lied about his son’s paternity on purpose to trick the bride’s parents, which was unfair and illegal.

1. When you have a job to speak, it’s dishonest to stay quiet.
2. When being quiet is the same as speaking, being quiet is lying.

This case, KIRAN BALA vs. BHAIRE PRASAD SRIVASTAVA (1982), was about a claimant whose first marriage was thrown out because she wasn’t of sound mind when she got married. Her second marriage to the responder was hidden from the groom and his parents because she didn’t want to tell them why her first marriage was thrown out. Based on the Hindu Marriage Act, the court said that the groom’s consent was obtained through fraud, and the marriage was thrown out.

1. Misrepresentation

Section 18 of the Indian Contracts Act explains what misrepresentation is, and it can be broken down into three types:

1. When he says something about a fact that isn’t true but that he thinks it is.
2. When the person who lies breaks their duty and gets something good out of it, even though he wasn’t trying to trick the other person.
3. When one party does nothing wrong and the other party makes a mistake about the agreement’s issue.

The one thing that all three types have in common is that the misrepresentation was made by accident and not on purpose to trick the other party.

The person whose consent was obtained through misinformation has to prove their case. If the other party is wronged, they can choose to cancel their consent, but they can’t sue the other party for damages.

For example:

Deepak bought Shyam radio because he trusted him and said it was in good shape. After a while, the radio stopped working right. Deepak thought he had been lied to, but Shyam was sure his radio was fine and didn’t mean to trick him.

1. Mistake

A mistake in Indian Contract Law can be one of two types:

1. Error in the Facts
2. A mistake in the law

Mistake in the facts

It is called a mistake of fact when both or one of the parties doesn’t understand a real truth. There are two kinds of mistakes in facts:

1. Mistake on Both Sides

In Section 20, it says that both parties have made a bilateral mistake when they do not agree on the same thing in the same way and are therefore wrong about a fact that is important to the contract. This deal is said to be null and void.

For example: Deepak agrees to buy a cow from Shyam, but it turns out that the cow was already dead when the deal was made, and neither party knew that. It is thought that the deal is not valid.

2. Mistake on One Side

Part 22 says that if one person made a mistake of fact, the contract will not be null or voidable; it will still be valid as long as the mistake doesn’t have to do with the subject of the contract or the person who signed it.

In the 1990 case Dularia Devi v. Janardan Singh, the plaintiff, a woman who couldn’t read or write, wanted to give her property to her daughter. There were two papers with her thumbprints on them. She thought they were gift deeds for her daughter, but the second one was really for the suspects who were carrying out the deed. After that, she sued to get the sale deed thrown out, and it was decided that the woman had no idea what the second paper was for, so it was thrown out.

Law Mistake

Ignorantia Juris non-excusant is the saying that Section 21 of the Indian Contract Act,1872 is based on. This means that not knowing the law is not an excuse. So, it says that a deal can’t be broken just because someone made a mistake about an Indian law.

1. Private Rights of Property: One party doesn’t know all of the other party’s private rights, so it’s okay for them to break the rules.
2. A mistake about a foreign law is treated the same as a mistake about facts, and it’s okay to make that mistake because you don’t need to know about foreign laws.