Consent.

     Meaning of Consent.

It is essential in the creation of a contract that both the parties agree to the same thing in the same sense. It means consent of all the parties is necessary which must be free also. Consent means an unconditional and absolute assent given by the offeree to an offer According to Section 13 of Indian Contract Act, consent means, "two or more persons are said to consent when they agree upon the same thing in the same sense." As such, consent denotes, "two minds in same sense". When the parties to the contract have any ambiguity or confusion with regards to the terms of an agreement or as regards to the subject matter of the agreement or as to the identity of the party of agreement, they are not said to consent since both the parties do not agree upon the same thing in the same sense.

   Meaning of Free Consent.

For a valid contract, it is necessary that parties give their respective consent freely. It mean, free consent is the consent given by the parties at their sweet will. It should not be caused by any sort of physical or mental pressure or force or by any mistake. According to Section 14 of the Indian Contract Act, "consent is said to be free when it is not caused by (i) coercion, (ii) undue influence,(iii) fraud, (iv) misrepresentation, or (v) mistake."

Thus, for a valid contract, it is not only necessary that the parties should agree upon the same thing, in the same sense but they must assent freely. When there is a consent, but no free consent, the contract is generally voidable at the option of the party whose assent was not free. In the words of Salmond, "when parties agree upon different things or in different senses, the parties are said to be at no consent."

It is, therefore, clear that this section deal with two situations. Firstly, the situation of no 'free consent and secondly the situation of no consent. If the consent is caused by any of the four factors viz., coercion, undue influence, fraud or misrepresentation, the consent is not free. In case of mistake, there is no consent at all. If the consent is caused by mistake, there is no unionism of minds or no consensus between the parties.

1. Coercion: Is the committing or threatening to commit any act forbidden by the Indian Penal Code or the unlawful detaining or threatening to detain any property, to the prejudice of any person, whatever, the intention of causing any person to enter into an agreement.                                      (Section 15) 

It means use or a threatening to use the physical force against a person or property to compel him to enter into an agreement.

Example 1: A Hindu widow is forced to adopt 'X' under threat that her husband's dead body would not be allowed to be removed unless she adopts X'. Such adoption is voidable since it has been induced by coercion.

Example 2 : 'A' threatens to kill 'B', if the former does not transfer his house in favour of 'A' at very low price. It is transferred by 'A'. Such transfer or agreement is voidable on account of being induced by coercion.

2. Undue Influence: Undue influence means improper exercise of power over the mind of one of the parties under contract, by the other party. Section 16 of Indian Contract Act expresses that a contract is said to be induced by undue influence where 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. A person is deemed to be in a position to dominate the will of another such as (i) parents and child, (ii) guardian and ward, (iii) doctor and patient, (iv) lawyer and client, (v) trustee and the beneficiary, (vi) spiritual jure and his disciple, (vii) teacher and the taught etc. The presumption of undue influence can be redutted by showing that the party said to have been influenced had independent legal advise of one who had full knowledge of the relevant facts.

 Example: 'A', a money lender advances Rs. 100 to 'B', an agriculturist and by undue influence, induces 'B' to execute a bond for Rs. 200 with interest at 6 percent per month. The court may set the bond aside, ordering 'B' to repay Rs. 100 with such interest as may be seen just and reasonable. 

The burden of proving that the contract was not induced by undue influence, lies on the party who was in a position to exercise and dominate the will of the other.

3. Fraud : It is the willful  misrepresentation or concealment of material facts of an agreement by a party to it. Such deliberate misrepresentation is made with an intention to deceive the other party and thereby to induce him to enter into an agreement. To deceive means to induce a person to believe that the fact is true which is infact false (untrue). Thus, in order to prove fraud, it is to be shown that a false representation has been made 

(i) knowingly or intentionally, 

(ii) without belief in its truth, and 

(iii) recklessly without caring whether it is true or false.

According to Section 17 of Indian Contract Act, fraud means and includes any of the following acts committed by a party to a contract or with his connivance or by his agent with the intention to deceive another party thereto or his agent or to induce him to enter into the contract:

  (1) the suggestion, as a fact, of that which is not true by one who does not believe it to be true.

  (2) the active concealment of a fact by one having knowledge or belief of the fact.

  (3) a promise made without any intention of performing it.

  (4) any other act, fitted to deceive. 

  (5) any such act or omission as the law specially declares to be fraudulent.

Thus, to be a fraud, there must be an assertion of something false, within the knowledge of the party asserting it.

Example 1: 'A' sells by auction to 'B', a horse which 'A' knows to be unsound. 'A' says nothing to 'B' about the unsoundness of the horse. This is not a fraud by 'A'.

Example 2: 'H' sold to 'W', certain pigs. The pigs were suffering from some fever which 'H' knew it. The pigs were sold with the faults. 'H' did not disclose about the fever to 'W'. It was held that there was no fraud.

Example 3: 'A' sells by auction to 'B', a horse which 'A' knows to be unsound. 'B' is 'A's daughter and has just attained majority of age. Here the relation between the 4. Misrepresentation : Misrepresentation is also an incorrect statement but it is not due to any intention of deceiving or any desire to deceive or defraud the other party. 

It is innocent and the party making misrepresentation actually believes it to be true. According to Section 18 of Indian Contract Act, misrepresentation can be grouped as follows:

 (i) When a person positively states that a particular fact is true when his information does not warrant it to do so.

 (ii) When there is a breach of duty by a person (but no intention to deceive) which brings an advantage to him and loss to the other.

 (iii) When the party causes the other party to the agreement to make a mistake as to the subject matter but innocently. Thus, the essential requirements of misrepresentation are :

(i)    there must be a representation of material fact, 

(ii)   it must be made with a view to inducing the other party to enter into a contract, 

(iii)  the other party must have been influenced to give his consent, 

(iv)  the aggrieved party must have been induced by the misrepresentation, 

(v)   the representation was made without any intention to deceive other party, 

(vi)  the misrepresentation is the basis of the consent.

Example: 'A' informs 'B' that his estate is free from encumbrances ( mortgage or charge). 'B' thereupon buys the estate. In fact, the estate is subject to mortgage which was not known to 'A'. It is a case of misrepresentation.

  

 Consequences of Coercion, Undue Influence, Fraud and Misrepresentation.

When consent to an agreement is caused by coercion, the agreement is a contract voidable at the option of the party whose consent was so obtained. It means, the aggrieved party can have the contract set aside. If a contract is caused by undue influence, it is a contract voidable at the option of the other party whose consent was so obtained. If a contract was induced by fraud, the defrauded party has the following remedies :

(i) He can avoid the performance of contract.

(ii) He can insist that the contract shall be performed and shall be put in the position in which he would have been if the representation made had been true.

In case of misrepresentation, the aggrieved party can either avoid the agreement or insist to perform the contract and he be put in the position in which he would have been if the representation made had been true.

Mistake: A mistake may be defined as an erroneous (wrong) belief concerning something. It may be of two kinds: 

(1) mistake of fact, 

(2) mistake of law. Mistake of fact may be either bilateral or unilateral.

Consequences of mistake: Mistake renders a contract void and as such in case of a contract which is yet to be performed, the party complaining of the mistake may repudiate it i.e. he need not to perform it. If the contract has been executed, the party who received any advantage must restore it or make compensation for it as soon as the contract is discovered to be void.