Free Consent
The meaning of Contract according to the Indian Contract Act is an agreement between two parties on acceptance of an offer from one party to the other, under the Contract Law. A contract is enforceable by law. The main ingredient of a contract is the mutual promise between two parties to perform an act as decided in the agreement. Certain essential conditions have to be taken into consideration by the parties in a contract to make it a valid contract competency of parties, legal object, and free consent are some of the elements that must be taken into consideration to establish a valid contract according to Indian Contract Act 1872.
- Meaning of Consent
- Difference Between Consent and Free Consent
- What is Free Consent
- What is the Importance of Free Consent?
- Advantages and Disadvantages of Free Consent
- Factors Violating Free Consent
- Case laws related to Free Consent
- Conclusion
Among the essential elements of a valid contract, the free Consent of the Parties to a contract is one of the essentials without which a Contract will be void. It is improper for any parties to a contract to sign it under duress or coercion. Students can also read Contract Law for a better understanding.
Meaning of Consent
A meeting of the minds between the two parties is required for consent, according to Section 13 of the Indian Contract Act, which states that "when two parties enter into the contract they should agree upon the same thing in the same manner." When someone freely accepts another person's offer or desires, that person is exhibiting consent under Legal Studies..
A contract involving two or more parties to mutually commit to achieving a goal or any other kind of agreement is called consent. Understanding free consent in business law facilitates comprehension of all the legal guidelines that businesses must go by.
Students can also explore some important topics related to the Free Consent.
Difference Between Consent and Free Consent
Here's a difference between Consent and Free Consent:
Basic difference | Consent | Free consent |
Definition | Consent is defined as the agreement of all parties to a contract to the same item in the same sense or with the same intent. | Free consent is defined as an agreement that is entered into with the parties' informed permission and is free from fraud, deception, undue influence, error, and coercion. |
Essential elements | The same subject must be in the minds of all contract parties. They ought to concur on the same issue. | When there is free consent, there shouldn't be any fraud, misrepresentation, error, undue influence, or coercion involved. |
Voidability | If both parties do not assent to a contract, it is null and void. | A contract is voidable if there isn't free consent in it. The party who feels wronged may choose to have the contract void. |
What is Free Consent
Section 13 of the Indian Contract Act stipulates that "when two parties enter into the contract they should agree upon the same thing in the same manner." This means that consent requires a meeting of the minds between the two parties. When someone freely accepts another person's offer or desires, that person is exhibiting consent. When someone voluntarily accepts another person's offer or wish, that person has consented. According to the Indian Contract Act, assent that is free from force, undue influence, fraud, misrepresentation, or error is referred to as free consent.
What is the Importance of Free Consent?
A free consent protects the basic structure and enforceability of the contract
Free Consent protects the parties from undue influence, fraud, force, misrepresentation, etc.
The principles laid down by the doctrine of consensus-ad-idem are taken into consideration.
Students may also delve into key topics related to the Free Consent.
- Contract of Indemnity
- Agreement with Minor
- Difference between offer and invitation to offer
- Contract of Guarantee
Advantages and Disadvantages of Free Consent
Here's a difference between Consent and Free Consent:
Advantages | Disadvantages |
Free Consent between two parties makes the Contract legally binding and Parties obligations are more | In some instances, parties might feel pressure and influenced by the acts of other parties |
Free Consent helps in balancing the obligations and liabilities of a contract | In some cases, parties might face loss due to a lack of efficiency to negotiate |
Free Consent acts as a trust mechanism as the parties to a contract are sure of the facts that nothing is forceful here. | It gets complex in some cases to determine whether the consent is free or forced |
For maintaining friendly behaviour and partnerships both the parties need to enter into a contract willfully. | Free consent does not ensure that the relations between the parties will be peaceful and friendly there might be many other reasons for disputes between parties. |
Factors Violating Free Consent
Section 14 of the Indian Contract Act 1872 deals with free Consent. According to this section, free consent is considered to be free if certain factors do not violate it.
1. Coercion
According to Section 15 of the Indian Contract Act 1872, The act of coercing someone into signing an agreement is defined as either committing or threatening to perform an act prohibited by the Indian Penal Code or unlawfully detaining or threatening to hold any property to the detriment of any person.
Coercion is the act of compelling someone to sign a contract. When coercion is combined with threats or intimidation to obtain a party's consent, that consent is not given voluntarily.
To increase the legitimacy of a threat, coercion may entail the real infliction of bodily and psychological suffering. The threatened individual may then cooperate or obey if more harm is threatened.
How does Coercion affect free consent?
When coercion occurs, the contract becomes voidable. It suggests that the contract is voidable at the option of the party whose consent was not freely given. As a result, the party who feels wronged will choose whether to keep or end the contract.
Techniques used in Coercion
threatening to do anything that is prohibited by the Indian Penal Code.
intimidating someone into signing a contract by threatening to hold anything or even detain it without according to the law.
In the case of Chikkam Ammiraju v. Chickam Seshamma
In this instance, the husband coerced his wife and son into signing a release deed in favour of his brother about various properties that the wife and boy had claimed as their own by threatening to commit suicide.
The court determined that the release document was voidable since suicide constituted coercion as defined by section 15 of the Indian Contract Act.
2. Undue Influence
According to Section 16 of the Indian Contract Act 1872, when one of the parties acts dominantly or subverts the other party's wishes with the use of its power. Another thing that can go against free consent is undue influence. It happens when one of the other parties is more dominant than the other in any way. Their strong position over the opposing party gives them the potential to gain an unfair advantage. Manipulation of a person who is weak or reliant on another person is known as Undue Influence. It happens when someone has the power to influence another person's choice because of their relationship.
How does undue influence affect free consent?
An agreement is voidable at the option of the person whose assent was caused due to the effect of undue influence. Such a contract is subject to set aside. The only person with the ability to avoid or revoke a contract is that party. The third-party has no control over this right.
Essential Elements of Undue Influence
The essential elements to constitute undue influence are-
A relationship between two parties of trust, authority and confidence
Unfair persuasion: closely review the contract's provisions.
In the case of, Lakshmi Amma v. T. Narayana
In one instance, the patient was confined to a nursing facility due to a multitude of illnesses. There, he executed a deed giving one of his sons exclusive possession of all of his assets. The court determined that the gift could be voidable due to improper influence.
3. Fraud
According to section 17 of the Indian Contract Act 1872, Fraud is defined as the making of false statements, making of any promises with the intent to deceive, or plotting to obtain the upper hand over another individual. It entails making misleading claims about facts, leaving out pledges made during the agreement, acting dishonestly to deceive the opposing party, etc. and numerous more dishonest acts fall with this deception.
A person is not considered to have committed fraud if they remain silent about information that could influence their decision to sign a contract unless the situation calls for them to speak or if their silence is itself the same as speaking.
Essential elements to constitute fraud-
a statement or portrayal of reality that is made knowing it is untrue or without confidence in its veracity.
forced the other party to fulfill his demand
The actor is intended to cause harm or loss.
How does Fraud influence free Consent?
If fraud results in a null and void contract, the party that was duped has the right to withdraw from the agreement and is liable for damages as a result of the fraudulent agreement.
In the case of Ratan Lal Ahluwalia v. Jai Janider parsad
In addition to making the contract voidable at the discretion of the party whose agreement is obtained, fraud gives rise to a claim for damages relating to deception under common law.
4. Misrepresentation
According to section 18 of the Indian Contract Act, of 1872, giving a party a false statement, a phoney depiction of a fact, or supplying unauthorized information in an attempt to deceive the other party. All that constitutes a Misrepresentation is presenting false information at the outset of the transaction. Contract misrepresentation occurs when there is a chance that the facts committed at the ground level are not reliable. Negligent deception and innocent misrepresentation are the two categories of misrepresentations that apply here as well.
Fraudulent Misrepresentation
when something has been willfully misrepresented, done carelessly, or without considering it to be true. When someone makes a false representation and they know it is wrong or is careless about whether it is real or false, it is considered fraudulent misrepresentation.
Negligent Misrepresentation
When there is no logical basis for the deception and it is done carelessly, it is deemed a negligent misrepresentation. Negligent misrepresentation can only be shown where the representative owed the representee a responsibility to handle carefully. In this case, a person would only be held responsible if he had deliberately ignored the appointed task. Even in the lack of a fiduciary relationship, there is a duty between the two parties.
Innocent Misrepresentation
If a representation is free of errors and malicious intent and is backed by a reasonable basis for belief, it is deemed to be an innocent misrepresentation. After making an honest mistake, a person has the right to withdraw from a contract they engaged in, but they are not entitled to reimbursement. Contracts are not voidable unless there are good reasons to do so. Proof of innocence in the case of misrepresentation would be enough to establish the fact.
How does misrepresentation affect free consent?
Under the Specific Relief Act of 1963, the party who has suffered as a result of the misrepresentation when entering into a contract may elect to terminate the contract and rescind it within a reasonable amount of time.
5. Mistake
Mistake definitions are not included in the Indian Contract Act. In Sections 20, 21, and 22, the concept of error is discussed. A mistake occurs when two persons unintentionally seek to achieve the same goal. If a material truth that was unknown to both parties at the time of the agreement was misrepresented, the agreement is void. There are two types of mistakes as per the Indian Contract Act of 1872.
Mistake of fact
An error of fact occurs when one or both contractual parties misinterpret a language that is essential to comprehending the terms of the agreement. Such an error could be made as a result of miscommunication, carelessness, omission, etc. Errors are inadvertent oversights that are never deliberate. These errors may be bilateral or unilateral. Mistakes of facts are further divided into-
Bilateral Mistake
According to section 21 of the Indian Contract Act 1872, Bilateral mistakes occur when there is a factual error that affects both parties to a contract and is fundamental to the agreement. Bilateral errors can also occasionally be referred to as common or mutual blunders. Not every party will assent to the same concept or the same item when it comes to permission. Since no consent has been granted, the contract is null and void.
Unilateral Mistake
According to Section 22 of the Indian Contract Act 1872, When only one party to the contract makes a mistake, it is referred to as a unilateral mistake. In this scenario, the contract won't be deemed void. Section 22 of the Act stipulates that a mistake made by one party does not render the contract unenforceable. As a result, the contract is still enforceable even if just one party is at fault.
Mistake of Law
The error may stem from a legal mistake made abroad or it may have something to do with a legal error that occurred in India. The premise is that, when it comes to Indian laws, ignorance of the law is not an adequate defence. This implies that neither party may assert that the other is ignorant of the law.
According to the Contract Act, no party may seek any redress because they are ignorant of Indian law. This will also involve interpreting any legal provisions incorrectly.
Nonetheless, ignorance of foreign law is not treated similarly. There is some wiggle room because the parties are not required to understand the nuances of foreign law. Consequently, an error of foreign law is treated as a factual error under the Indian Contract Act.
In the case of The State of Maharashtra v. Mayer Hans George In this case, A has been issued the order to arrest Y in her capacity as a court officer. Because A believes Z to be Y, he wrongly arrests Z. In this instance, A may defend the mistake by citing his good intentions.
Case laws related to Free Consent
Here's a important Case Laws related to Free Consent:
In the case of, Ranganayakama v. Alwar Sethi
The Madras High Court was asked to rule on the legality of a thirteen-year-old child's adoption by his mother, who was a widow. The adoptive son's family would not allow her husband's body to be taken from her home after his death until she had officially adopted the youngster. The Court in this case held that, because the widow was forced into the adoption, it was not legally binding on her.
In the case of, Ayekpam Angahi Singh and another v. Union of India and Ors.
By putting the highest bid, the plaintiff in this case won the fishery auction. The rights in question were put up for sale for three years, with a 40,000 annual rent payment. The plaintiff requested that he be given the impression that the rent was paid for the entire three years. He therefore asserted that he was making the same error. In this instance, the error was unilateral, therefore there was no way to avoid the contract.
Conclusion
For an agreement to be enforceable, free consent is essential. It is impossible to overestimate the importance of free consent. The Party's consent must be given voluntarily and freely. The agreement must be accepted freely, free from duress or deception. Free consent is important as the parties who are into a Discharge of Contract the promises and obligations by the contract so it is crucial for both parties to enter into a contract with free consent without any fraud, coercion or undue influence.
Frequently Asked Questions (FAQs)
According to the Indian Contract Act, assent that is free from force, undue influence, fraud, misrepresentation, or error is referred to as free consent.
Section 13 of the Indian Contract Act, states that "when two parties enter into the contract they should agree upon the same thing in the same manner."
The case for free Consent is that all the parties should be free from Coercion, fraud, undue influence, and misrepresentation.
According to Section 15 of the Indian Contract Act 1872, no consent of any of the parties should be taken through Coercion.
An error of fact occurs when one or both contractual parties misinterpret a language that is essential to comprehending the terms of the agreement. Such an error could be made as a result of miscommunication, carelessness, omission, etc.
Section 14 expands on Section 13 by defining free consent as assent that is not the result of coercion (section 15), undue influence (section 16), fraud (section 17), deception (section 18), or error (sections 20, 21, and 22). It is vital to recognise that not all consents are free.
Freedom of contract is a principle that people have the right to enter into contracts on terms of their own choosing. It's closely related to free consent, emphasizing voluntary agreement without government interference, but is limited by laws protecting against unfair practices.
Disclosure plays a crucial role in free consent by ensuring all parties have access to relevant information before agreeing. Failure to disclose material facts can be seen as a form of misrepresentation, potentially invalidating consent.
While not universally required in all contracts, the principle of good faith emphasizes honest dealing and fair conduct. It supports free consent by encouraging transparency and discouraging manipulative tactics that might undermine genuine agreement.
A cooling-off period is a duration after signing a contract during which a party can cancel without penalty. It's designed to protect consumers and ensure their consent remains free even after initial agreement, allowing time for reconsideration.
Yes, cultural or language barriers can affect free consent if they prevent a party from fully understanding the terms of the contract. In such cases, courts may consider whether reasonable steps were taken to ensure understanding and genuine consent.
Fraud involves intentional deception to induce someone into a contract, while misrepresentation can be innocent or negligent. Both affect free consent, but fraud requires proof of intent to deceive, making it more serious in legal terms.
Generally, if a party was so intoxicated that they couldn't understand the nature and consequences of their actions, the contract may be voidable. However, if the intoxication was voluntary and the other party was unaware, the contract might still be enforceable.
Non est factum ("it is not my deed") is a defense used when a person signs a document fundamentally different from what they thought they were signing. It relates to free consent by addressing situations where a party's consent was based on a fundamental misunderstanding.
Unconscionable conduct refers to behavior that is extremely unfair or oppressive, taking advantage of a weaker party. While not directly related to free consent, it can invalidate a contract if one party exploited the other's vulnerability or lack of bargaining power.
While consideration (something of value exchanged) is separate from consent, its presence helps demonstrate that parties intended to enter a binding agreement freely. Lack of consideration might indicate lack of true consent or a gift rather than a contract.
Express terms are explicitly agreed upon, clearly demonstrating consent. Implied terms, added by law or custom, may not have been specifically consented to but are assumed to be part of the agreement. This shows that consent in contract law isn't always explicit.
Apparent authority allows a third party to rely on the appearance that someone has the authority to act on behalf of another. While not directly about consent, it affects how consent is perceived and relied upon in contractual relationships involving representatives.
Adhesion contracts, where one party has much more power and presents non-negotiable terms, challenge free consent. Courts may scrutinize these more closely, recognizing that while there's technical consent, the weaker party may have had little real choice.
Frustration of purpose occurs when an unforeseen event fundamentally changes the nature of the contract. While initial consent was free, this doctrine recognizes that parties might not have consented had they known about the future event, allowing for contract termination.
Duress negatively impacts free consent by forcing a party to enter into a contract through threats or physical force. When duress is present, the contract may be voidable as the consent was not given freely.
While both affect free consent, undue influence involves exploiting a relationship of trust or authority to pressure someone into a contract. Duress, on the other hand, involves direct threats or physical force to compel agreement.
Capacity refers to a person's legal ability to enter into a contract. Free consent requires that all parties have the mental capacity to understand the nature and consequences of their agreement. Minors, individuals with certain mental disabilities, or those under the influence of substances may lack this capacity.
A mistake of fact occurs when one or both parties enter into a contract based on an incorrect understanding of a material fact. This can affect free consent if the mistake is significant enough to change the nature of what was agreed upon.
Emotional pressure alone typically doesn't invalidate consent unless it rises to the level of undue influence or duress. However, if the emotional pressure is severe and exploits a person's vulnerability, it might affect the freedom of consent.
Generally, silence does not constitute consent in contract law. However, in certain circumstances, such as previous dealings or specific trade customs, silence might be interpreted as acceptance. It's crucial to communicate clearly to avoid misunderstandings.
The mailbox rule states that acceptance is effective when sent, not when received. This can impact the timing of when mutual consent is considered to have occurred, especially in situations where there might be a delay in communication.
The age of consent in contract law (usually 18 in most jurisdictions) determines when a person can legally enter into binding contracts. Contracts made by minors are generally voidable, protecting them from entering agreements without fully understanding the consequences.
Free consent is a fundamental principle in contract law where parties agree to terms without any form of coercion, undue influence, fraud, misrepresentation, or mistake. It ensures that all parties enter into the contract voluntarily and with a clear understanding of its terms.
A contract that is "void for vagueness" lacks specificity in its terms, making it unclear what the parties actually agreed to. This relates to free consent because parties cannot truly consent to terms they don't understand or that are ambiguous.
An invitation to treat (like a product display) is not an offer but an invitation to make offers. This concept is important for understanding when true consent to a contract occurs - not at the invitation stage, but when an offer is actually made and accepted.
"Caveat emptor" (let the buyer beware) places some responsibility on the buyer to investigate before purchasing. While it doesn't negate the need for free consent, it suggests that consent can be considered "free" even if a party didn't fully investigate all aspects of the deal.
The "meeting of minds" refers to mutual agreement or consensus between parties on the essential terms of a contract. It's a crucial element of free consent, indicating that all parties have the same understanding of what they're agreeing to.
Informed consent means that a party has been given all relevant information to make a decision about entering into a contract. It's crucial for free consent as it ensures parties understand what they're agreeing to and can make an educated choice.
Capacity to contract is crucial for free consent. It ensures that parties have the legal and mental ability to understand and agree to contract terms. Without capacity, consent cannot be considered truly free or informed.
The "reasonable person" standard is used to assess whether a party's consent was truly free. Courts consider whether a reasonable person in the same situation would have understood the contract terms and freely agreed to them.
In online contracts, the "meeting of the minds" can be more challenging to establish. Courts often look at factors like clear presentation of terms, opportunity to review, and affirmative actions (like clicking "I agree") to determine if there was genuine mutual assent.
Coercion negatively impacts free consent by using force or threats to compel a person to enter into a contract. Like duress, it renders the contract voidable as the agreement wasn't made voluntarily.
Misrepresentation, whether innocent, negligent, or fraudulent, can invalidate free consent by providing false information that influences a party's decision to enter the contract. The affected party may have the right to rescind the contract.
Economic duress occurs when one party exploits the other's economic vulnerability to force agreement. While not as clear-cut as physical duress, it can still impact free consent if it leaves the vulnerable party with no reasonable alternative.
No, undue influence negates free consent. It occurs when one party exploits a position of power or trust to influence the other unfairly. The resulting contract may be voidable as the consent wasn't truly free.
Promissory estoppel can enforce a promise even without formal consent or consideration, based on one party's reasonable reliance on the other's promise. While it doesn't directly involve free consent, it shows how the law sometimes prioritizes fairness over strict consent rules.
Duress typically only affects the parties directly involved in the contract. However, if a third party was aware of the duress and benefited from the contract, they might not be able to enforce it. The law aims to prevent people from profiting from coercion, even indirectly.
Standard form contracts, or "boilerplate" contracts, can challenge the notion of free consent as they're often non-negotiable. Courts may scrutinize these more closely, especially unfair terms, to ensure that consent wasn't undermined by unequal bargaining power.
The parol evidence rule, which generally excludes external evidence to modify a written contract, can sometimes conflict with proving lack of free consent. Courts must balance the rule's purpose of contract certainty with the need to ensure agreements were freely made.
In a unilateral mistake (where only one party is mistaken), the contract is usually still valid unless the other party knew of the mistake. In a bilateral mistake (where both parties are mistaken about the same thing), the contract may be void as there was no true meeting of the minds.
Unconscionability can invalidate a contract even if there was apparent consent. It protects against extremely unfair agreements, recognizing that true free consent is impossible in situations of gross inequality of bargaining power or extremely unfair terms.
Reasonable reliance is often considered in cases of misrepresentation or promissory estoppel. It relates to free consent by examining whether a party's decision to enter a contract was based on reasonable trust in the other party's statements or promises.
While illegality doesn't directly affect consent, it can void a contract regardless of the parties' willingness to agree. This shows that free consent alone is not always sufficient for a valid contract; the agreement must also be legal.
The contra proferentem rule, which interprets ambiguous terms against the party who drafted them, indirectly supports free consent. It encourages clear drafting and protects the party who had less control over the contract terms.
Consideration, while not directly related to consent, helps prove that parties intended to enter a binding agreement freely. The exchange of something of value indicates a deliberate decision to form a contract, supporting the notion of free consent.
A unilateral mistake (where only one party is mistaken) generally doesn't void a contract unless the other party knew or should have known about the mistake. This shows that the law balances the importance of free consent with the need for contractual certainty.
Good faith obligations require parties to act honestly and fairly, not just at formation but throughout the contract's life. This ongoing duty helps ensure that the initial free consent isn't undermined by later unfair behavior.
Force majeure clauses address unforeseeable circumstances that prevent contract fulfillment. While not directly about consent, they show how parties can freely agree to terms that might later excuse performance, demonstrating the complexity of consent over time.
Specific performance, where a court orders a party to fulfill their contractual obligations, is based on the idea that the parties freely consented to the terms initially. It's often used when monetary damages aren't sufficient, reinforcing the binding nature of freely given consent.
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