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Meaning of free consent in contract law is the parties entering into a contract must give an offer and acceptance at their own will and consent without any external factors or external forces. In this article, we have discussed notes on free consent in contract law.

Section 13 of the Indian Contract Act, defines the term ‘Consent’ as “Two or more persons are said to have consented that when they agree upon the same thing in the same sense.” This is also said as the identity of minds or in Latin terms said as ‘consensus-ad-idem’.

What is Free Consent in Contract Law?

The free consent meaning has been provided under Section 14 of the Indian Contract Act, defines the term, free consent means, “The consent is said to be free when it is not caused by’;

  1. Coercion (Sec.15)
  2. Undue Influence (Sec.16)
  3. Misrepresentation (Sec. 17)
  4. Fraud (Sec. 18)
  5. Mistake (Sec. 20-22)

Let’s discuss them one by one;

a) Coercion

The coercion is defined under section 15 of the Indian Contract Act, 1872 as “The Coercion is the committing, or threatening to commit, or any act which is forbidden by the Indian Penal Code, 1860 or unlawful detaining or threatening to detain any property, to the prejudice of any person to enter into an agreement”.

Consent is said to be free when it is not;

i) caused by committing or threatening to commit any illegal act
ii) unlawful detaining or threatening to detain any person or property

Example: A person forces his father that if he will not sign the property papers, then he will kill his father. 

Thus, the above example is amounting to coercion and the contract which is signed under coercion is a voidable contract.

In the case of Ammiraju v. Seshamma, the court held that the coercion may aim against any person or stranger.

b) Undue Influence

The undue influence has been defined under section 16 of the Indian Contract Act, 1872 as “A contract is said to be induced by the undue influence when 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 uses that position to obtain an unfair advantage over the other”.

Here, the person is deemed to be in a position to dominate the will of another;

i) where he/she holds real or apparent authority over another person,
ii) where he/she stands in a fiduciary relation to another person,
iii) where he/she makes a contract with a person whose mental capacity is temporarily or permanently affected by the age, illness or mental distress, or
iv) where he/she is a principal over the agent.

Example: A doctor is in the dominant position with the relation to his patient and here the doctor influences the patient to sign papers for the operation. Here, the doctor induces the patient to sign the paper and the patient is under the influence. 

c) Fraud

The fraud has been defined under section 17 of the Indian Contract Act, 1872 as the term fraud includes any of the following acts committed by a party to a contract, or with his connivance, or by his agent with intent to deceive another party or his agent or to induce him to enter into the contract;

i) The suggestion, which is not true, by one who does not believe it to be true.
ii) The active concealment of a fact by one having knowledge of the fact or belief of the fact.
iii) A promise made without any intention of performing it.
iv) Any other act or omission fitted to deceive.
v) Any such act or omission as the law specially declares to be fraudulent.

Here, mere silence as to facts likely to affect the willingness of a person who is entering into a contract is not amounting to fraud.

Example: A sells a horse to B, but the horse is unsound and A says nothing to B that the horse is not a sound mind. Here, A makes a fraud.

d) Misrepresentation

The misrepresentation has been defined under section 18 under the Indian Contract Act, 1872 as “The misrepresentation means, one party presenting the false representation of the facts without any wrong intentions or to deceive the other party. 

In misrepresentation, the party who presented the false facts is innocent and has done the act without knowing it and without any intention to deceive the other party.

e) Mistake

When one of the parties in the contract has given its consent to the contract under some kind of mistake,  misunderstanding or misinterpretation, then the consent is said to be have been given by mistake. 

At this point, the contract is voidable at the option of the party whose consent was obtained by mistake.

Example: Akash wanted to enter into a contract with Suresh but mistakenly enters into a contract with Ramesh believing him to be Suresh.

Under contract law, there are two kinds of mistakes;

1) Mistake of Law
2) Mistake of Fact

1) Mistake of Law

When the party has any misunderstanding with views to the law, it is called the Mistake of Law. Now, the party can be confused regarding the law of America or the law of a foreign land. If it is a mistake regarding the law of America, the contract cannot be avoided.

2) Mistake of Fact

When the parties have any misunderstanding regarding the facts, subject matter or terms and conditions of the contract, it is said to be a Mistake of fact. The misunderstanding can be on the part of one party or both of them.

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