Consent plays a central role in forming a valid contract under the Indian Contract Act, 1872. For an agreement to be legally enforceable, the parties involved must agree on the same thing in the same sense. This shared understanding is referred to as “consent.” However, not all consent is considered valid. The law requires that consent under Indian Contract Law must be free from coercion, undue influence, fraud, misrepresentation, or mistake. When any of these factors are present, the contract may become voidable at the option of the affected party.
What Is Free Consent?
Free consent means that the agreement between the parties was made without any pressure or deception. If a party agrees to a contract due to coercion, undue influence, fraud, misrepresentation, or mistake, then the consent is not free. The contract becomes voidable if it can be shown that the party would not have given consent. Especially, without the influence of such factors.
What Is Coercion
Under Section 15 of the Indian Contract Act, coercion refers to the act of committing or threatening to commit any act forbidden by the Indian Penal Code. It also includes unlawfully detaining or threatening to detain any property. This is with the intent of forcing someone to enter into an agreement. The law clearly states that it does not matter whether the Indian Penal Code is actually in force in the place where coercion is used. For example, if someone forces another person to enter into a contract by criminal intimidation on the high seas. Even if local laws differ, this still qualifies as coercion under Indian law.
What Is Undue Influence and Its Legal Impact
Section 16 defines undue influence as a situation where one party is in a position to dominate the will of another and uses that position to gain an unfair advantage. This can occur in relationships involving authority or trust, such as parent and child, doctor and patient, or moneylender and borrower. If a contract appears one-sided or unjust, the burden of proof lies on the dominant party. They need to show that there was no undue influence. For instance, if a doctor charges an excessive fee from a sick patient due to his influence. It amounts to undue influence. However, ordinary commercial transactions, even during times of financial crisis, may not necessarily be considered undue influence.
What Is Fraud in Contracts
Fraud involves intentional deception by one party to mislead another into entering a contract. As per Section 17, fraud includes acts like suggesting false facts without belief in their truth, actively hiding facts, making promises without any intention to perform, and any other act designed to deceive. The law also considers any action that is legally declared fraudulent. The element in fraud is the intention to deceive, and when it is proven, the affected party has the right to cancel the contract or demand performance as if the representation had been true.
What Is Misrepresentation and Its Consequences
Misrepresentation, under Section 18, occurs when a person asserts something as true without proper information, breaches a duty unintentionally but gains an advantage by misleading another, or causes a party to mistake the substance of the subject of the agreement. Unlike fraud, misrepresentation is not intentional. However, it still affects the validity of the contract. If the misled party had the opportunity to discover the truth through ordinary diligence, the contract is not voidable.
What Is The Legal Effect of Coerced or Misled Consent
When consent to a contract is obtained through coercion, fraud, or misrepresentation, the agreement becomes voidable at the option of the person whose consent was improperly obtained. This person can either cancel the contract or insist on its performance as if the misrepresented facts were true. However, if the consent was based on misrepresentation or silence that is not fraudulent and the party had the means to uncover the truth with reasonable care, then the contract cannot be avoided.
Conclusion
Free consent is a fundamental requirement for the validity of contracts under the Indian Contract Act, 1872. When consent is influenced by coercion, undue influence, fraud, misrepresentation, or mistake, the legal enforceability of the contract is compromised. This clarity helps both individuals and businesses maintain trust and accountability in contractual relationships.
