Download Meaning of Consent

FREE CONSENT OF
PARTIES
• According to sec.10 of
indian co. act it is very
important that the consent
of the parties of a contract
must be free. it means both
the parties should agree
upon the same thing in the
same sense
Meaning of Consent
ACC. TO SEC.10 of indian contract
act, ‘Two or more persons are said
to consent when they agree upon
the same thing in the same sense.’
Imp.pts.--Two or more persons agree upon a
thing.
They agree upon the same thing in
the same sense.
Case-Rafflesv/s wichelhouse---pearless oct. & december.
Case-bala devi v/s mazoomdar----old
lady executed a deedto manage her
land
Case---shart chand v/s kanai lal---one
Free consent
• According to section 14 of
indian co. act, consent is said to
be free when it is not caused
by;
• Coercion(section 15)
• Undue influence (section 16)
• Fraud (section 17)
• Misrepresentation (SECTION 18)
• Mistakes (SECTION20 TO 22)
COERCION
• According to section 15 of
indian contract act, “ coercion
is committing or threatening to
commit any act forbodden by
the indian penal code or the
unlawful detaining or threatning
to detain any property , to the
prejudice of any person
whatever,with the intention of
causing any person to enter into
Essentials of coercion
• Committing of any act forbidden by
indian penal code-caseRangnaykumma v/s Alwarsetti---a
widow lady was forced to adopt a
child.
• Threatening to commit any act
forbidden by indian penal code-caseAmiraju v/s seeshamma---husband
threatened to commit suicide if
release deed not given by wife.
• Unlawful detaining of any propertycase---an agent refused to handover
books of a/cs unless released from
Elements contd.
• Threatening to detain any property—
case-Bansraj v/s secretary—on nonpayment of fee by son threat to attach
property of father was given &father
paid amt. under coercion.
• Coercion can be used by promisor or
any other person.
• Coercion can be against the promisee
or against any other person.
• Objective of coercion is entering into
contract with the party.
• Place of coercion—whether indian
penal code is or not in force.
Effect of coercion• Voidable at the option of
aggrieved party.
• Demand of restitution-to give
back benefit recd. Or taken.
• Burden of proof—lies on
aggrieved party.
Undue influence-• According to section 16 of
indian co. act, ‘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 the position to dominate
the will of the other and uses
that position to obtain an unfair
advantage over the other;
Main pts.--
• One party can dominate the
other
• The dominant party uses his
position to obtain unfair
advantages over the other.
• The dominant party obtains the
unfair advantage.
• Position to dominate the will—
• --------------real or apparent
authority.
• --------------fiduciary relationship.
• --------------unhealthy mental
Leading cases related--• MANNU SINGH V/S UMA DUTT
PANDEY—a spiritual guru induced
his devotee to gift him whole
property.
• DILARAM V/S SARDHA---doctor
forced old man to pay excessive fee.
• RANI ANNAPURNI V/S
SWAMINATHAN
-Loan to a Rani @100%.
BURDEN OF PROOF-person in
dominating position will prove that
consent was free.
Effects-voidable,repudiation.
When undue influence
suspect• Contract without consideration.
• Difference in
age,knowledge,intelligence &status
of parties.
• Fiduciary relationship.
• In case of pardanashin woman.
• When transaction seems to be
unconscionable.-case-Chunni kumar
v/s roop singh-bond of rs.25,000 for
borrowing amt. of rs.3700/- by heir to
an estate.
Pardanashin woman
• If a woman observes parda and remains
behind the walls but performs all the
transactions,goes to court, appears as
witness, recovers rent from tanents, sits
with the family and with the other family
members on various topics, or correspond
with others, is not considered as P.W. In
the eyes of law.
• The person who is blamed for U.I. will have
to prove---• The terms were fully explained.
• Fully understood.
• Consent was free.
• Contract was not unfair & illegal.
Difference b/w coercion
& undue influence.
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Pts.-----------Meaning.
Type—physical or mental.
Relation of parties.
Burden of proof.
Effect.
Place-not imp. In coercion.
Fraud-• According to section 17 of indian
contract act, ‘fraud means and
includes any one of the followings
acts committed by a party to a
contract or with his connivance or by
his agent with intent to deceive or
induce a person to enter into a
contract; a] the suggestion as a fact,
of that which is not true by one who
does not believe it to be true; b] the
active concealment of facts by one
having knowledge or belief of the
fact; c] a promise made without
intention of performing it; d] any other
act fitted to deceive; e] any such act
or omission as to the law specially
Essential elements of
fraud-• 1.Fraudulent work can be done by one
party or by his agent.case—Resa rever
silver mining v/s smith—smith applied for
shares of a co.which issued prospectus
containing false statements.
• Courts declared the contract voidable at
smith’s desire.
• 2.The suggestion that a fact is true when it
is not true by one who does not believe it
to be true; -section-17(1)
Contd.-
• Case-Kala Meah v/s Perperic—a
person gave wrong statement about a
property being sold by auction, courts
declared it fraud. But he is not guilty
if he believes it to be true
• 3.Fraud by active concealment.section17(2)
• 4.A promise made without intention of
performing it.-section17(3)
• 5.Any other act fitted to deceive.section17(4)
• 6.Any such act or omission as the law
specially declared to be void.section17(5)
Silence as fraud.
• Acc. To section 17 of indian contract
act- “mere silence as to fact likely to
affect the willingness of a person to
enter into a contract is not a 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.”
Exceptions where
silence is fraud• A)WHERE CIRCUMSTANCES ARE SUCH
THAT IT IS THE DUTY OF THE PERSON
KEEPING THE SILENCE-----• 1)Statutory obligations to disclose the
material facts.-transfer of property.
• 2)Contracts of utmost good faith• Contracts of insurance.
• Family settlements.
• Contracts for sale of land.
• Contracts of marriage.
• Contract of share allotment.
• Contracts of partnership.
• Contracts of guarantee.
• B) WHERE SILENCE IS EQUAL TO SPEECH
EFFECTS OF FRAUD• 1)Right to repudiate the contract.—
but this right terminates when----the
party had the means of discovering
the truth.
• Where the party was not defrauded.
• If the party affirms the contract.
• 2)Right to affirm the contract.
• 3)Claim for restitution &
compensation.
Misrepresentation
• The word representation means a
statement of fact made by one party
to the other with regard to some
matter essential for the contract, to
induce other party to enter into
contract. A representation when
made innocently is called
misrepresentation.
• Fraudulent misrepresentation.
• Innocent misrepresentation
Definition of misrepresentation
• Section 18 of Indian contract act
says--Misrepresentation means and includes;
1)The positive assertion in a manner
not warranted by information of the
person, making it or that which is not
true, though he believes it to be true.
2)Any breach of duty which ,without an
intent to deceive, gives advantage to
the person committing it or anyone
claiming under him by misleading
another to his prejudice of anyone
claiming under him.
3)Causing , however ,innocent, a party
to an agreement , to make a mistake
ELEMENTS OF M.R.
1)A positive assertion, which is
not true but party believes it to
be true.
2)Made to induce party to enter
the contract.
3)Made innocently.
4)One party gets some benefits
and other party suffers.
5)The person making statement
Forms of M.R.
• 1)POSITIVE ASSERTION-SEC.18(1)-CASE----
-Dairy v/s peek-co. mentioned in
prospectus that govt. has permitted them
to their tramways by steam, but they could
not seek permission for the same, a person
filed a suit, but courts regarded it as m .r. ,
as directors had honestly believed that
they will get sanction.
• 2)Breach of duty- sec.18(2)------case– With
v/s Flanagan—negotiation of sale of a
medical store started,sales of store were
quoted but afterwards sales declined due
to illness of seller, buyer filed a suit for
fraud, court declared it voidable .
• 3)Causing mistake by innocentmisrepresentation –sec.18(3)
Effects of M.R.
• 1)RIGHT TO REPUDIATE THE CONTRACT--•
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SEC.19---contract will be voidable.
Exceptions—when truth can be discovered.
When consent was not induced by m.r.
If party accepts it as it is.
If party is getting benefit even after
knowing about m. r.
On lapse of reasonable time.
2)Restitution—to get back money given.
3)No right to claim damages.
BURDEN OF PROOF---THE PARTY WHO
WANTS TO REPUDIATE THE CONTRACT.