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Free Consent
Business Law
October 19, 2015
Table of Contents
Section 1 Meaning of Consent and Free Consent
Coercion
Undue Influence
Fraud
Misrepresentation
Mistake
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Coercion
What is it?
Examples:
X threatens to kill Y if the latter (Y) does not agree to sell his diamond ring for
Rs. 2500. ( Threat to kill is forbidden by IPC )
Mr. A executes a transfer bond for the house under fear of assault. It will be a contract
voidable at the option of Mr. A since his consent was obtained by coercion.
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Undue Influence
What is it?
Section16, Undue influence is the improper use of any power possessed over the mind
of the contracting party. According to section 16 a contract is said to be affected by
undue influence when:
1.
The relations subsisting between the parties are such that one of the parties is in a
position to dominate the will of other.
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Undue Influence
Difference between coercion and undue influence :
COERCION
1. Threat of an offence
2. Physical character
3. Intention to enter into a contract
4. Criminal act is involved
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UNDUE INFLUENCE
1. Dominate the will of other
2. Moral character
3. Intention to take a unfair advantage
4. No criminal act is involved
Fraud
What is it?
According to section 17 fraud means and includes any of the following acts committed
by a party to a contract or by any one with his connivance or by his agent with intent to
deceive another party thereto or his agent or to induce him to enter into contract:(a) A
suggestion as to fact of that which is not true by one who does not believe it to be
true(b) An active concealment of a fact by one having knowledge or belief of the fact.
(c) Any other act fitted to deceive(d) A promise made without any intention of
performing it
When any person makes to another a statement which he does not himself believes to
be true to induce the latter to enter into the contract, he commits a fraud.
Example:
X says to Y that his coat is made of pure wool, though he knows that it is untrue. Y
purchases the coat believing Xs statement true. It is a fraud by X and contract is
voidable.
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Misrepresentation
What is it?
Example:
Unwarranted positive assertion X says to Y who intends to purchase his land that it
produces 50 quintals of wheat per acre. X believes the statement to be true, although
he did not have sufficient grounds for the belief. Later on, it was found that land
produces only 30 quintals of wheat per acre.
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Mistake
What is it?
When the parties do not agree on the same thing in the same sense because of some
misunderstanding, it is known as Mistake.
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Thank You
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substitute for consultation with professional advisors.