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FREE CONSENT. CONSENT

Two or more persons are said to consent when they agree upon the same thing in the same sense. (Consensus ad idem) Consent is said to be free when it is not caused by: 1: - Coercion 2: - Undue Influence 3: - Fraud 4: - Misrepresentation 5: - Mistake COERCION a.
1. 2. 3.

Definition: If a party commits an offence forbidden by the PPC, with the intention of obtaining consent of the other party. If the other party threatens to commit an offence forbidden by the PPC, with the intention of obtaining such consent. If the other party unlawfully detains any property to the prejudice of any person whatever, with the intention of obtaining such consent. If the other party threatens to detain unlawfully any property, to the prejudice of any person whatsoever, with the intention of obtaining such consent.

4.

b. Enforcement of PPC. c. Effect of coercion. d. Burden of proof.

UNDUE INFLUENCE
1.

A contract is said to induced by Undue Influence where the relation subsisting between the parties is such that one of the parties is in a position to dominate the will of the other; and Such party uses that dominant position to enter into a contract with the latter; and Such party has attained an unfair advantage over the other.

2. 3.

PRESUMPTION OF UNDUE INFLUENCE A person is deemed to be in a position to dominate the will of the other where: a. He holds a real or apparent authority over the other. b. Where he stands in a fiduciary relation to the other. c. Where he makes a contract with a person whose mental capacity is effected by reason of age, illness or mental or bodily distress. Burden of proof: Merely status of parties is enough to prove that undue influence might have been used unless the person in a dominating position can prove that: a. b. c. d. Full disclosure of facts was made. The price (consideration was adequate) The dominated party was in a position to get free advice. The dominated party gave free consent.

EFFECTS OF UNDUE INFLUENCE: The contract is voidable at the option of the party whose consent was not freely obtained.

DISTINCTION B/W COERCION & UNDUE INFLUENCE 1. 2. 3. 4. Type of Pressure. Burden of Proof. Nature of Transaction. Relationship between the parties. FRAUD Fraud means and includes any of the following acts to induce the other party to enter into a contract: 1. The suggestion, as a fact of that which is not true, by one who does not believe it to be true. 2. 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 such act or omission as the law especially declares to be fraudulent. 5. The act must have been committed to deceive and must have actually deceived. 6. Any other act fitted to deceive. 1. SILENCE AND FRAUD Mere silence as to facts likely to effect the willingness of a person to enter into a contract is not fraud, unless: A: the circumstances of the case are such that regard being had to them it is the duty of the person keeping silence to speak. B: silence is equivalent to speech itself. 2. EFFECTS OF FRAUD
3. DAMAGES

MISREPRESENTATION. Misrepresentation means an innocent misstatement of facts about the contract, made by one party to induce the other party to enter into a contract. A misrepresentation made intentionally is said to be fraud. Misrepresentation means and includes: 1. 2.

The positive assertion of that which is not true, although the person conveying it believes it to be true.

Any breach of duty which, without intent to deceive, gains an advantage to the person committing it, by misleading another to his prejudice. EFFECTS OF MISREPRESENTATON 1. The contract is voidable at the option of the aggrieved party. 2. A party to a contract, whose consent was obtained by misrepresentation, may claim that the contract shall be performed and it shall be put in the position it would have been if the representation would have been true. 3. If the party who was lead into believing something by misrepresentation could discover the truth by ordinary diligence, the contract would not be voidable. DISTINCTION BETWEEN MISREPRESENTATION 1. Intention to deceive. 2. Damages. 3. Right to rescind the contract. BURDEN OF PROOF: Lies on the party who wants to set the contract aside. FRAUD AND

MISTAKE Mistake is of two types, (1) Mistake as to Law (2) Mistake as to Fact. MISTAKE OF LAW 1: Ignorance of law is no excuse, everybody is supposed to know the law of his/her own country. No relief is granted to a person who entered into a contract on the ignorance of the law of the state. 2: Law of a foreign country (Agreement is void) . MISTAKE OF FACT A: Regarding existence of subject matter. B: Regarding identity of subject matter. C: Regarding quantity of subject matter. D: Regarding title of subject matter. E: Regarding price of subject matter. F: Regarding quality of subject matter. G: Regarding possibility of performance.

VALID, VOID and VOIDABLE AGREEMENTS.

Valid Agreements: - An agreement enforceable by law. Void Agreements: - An agreement not enforceable by law. A: In restraint of marriage. B: In restraint of trade. (Except seller of goodwill, in partnership) C: In restraint of legal proceedings. D: Uncertain agreements. E: By way of wager.

Voidable Agreements: - An agreement, which is enforceable at the option of one or more parties thereto, but not at the option of the other. 1. It is valid and binding on parties so long as it lasts. 2. Option to avoid it rests with one of the parties. 3. Party entitled to avoid contract is not bound to do so but may affirm it. 4. The other party remains bound to carry it out as agreed.

PERFORMANCE OF CONTRACTS
Single promise WHO CAN DEMAND PERFORMANCE WHO MAY PERFORM a. Promisor himself. b. Agent of promisor. c. Legal representatives. d. Third party. Joint promises Several joint promisors; single promisee. Single promisor; joint promisees. Joint promisors; joint promisees. 1. Who can demand performance

2. Who may perform? a.All promisors must jointly fulfill promise. b.Anyone may be compelled to perform. c. Each promisor may compel to contribute. d.Sharing of loss in case of default by one. e.Release of one promisor by promisee. RIGHTS AND LIABILITIES OF PARTIES AS TO PERFORMANCE OF RECIPROCAL PROMISES. 1. Contracts which consist of reciprocal promises to be simultaneously performed. 2. Contracts which consist of reciprocal promises to be performed as per the nature of the transaction. 3. Conditional and dependent promises. 4. Liability of party preventing event on which contract is to take effect.

Miscellaneous 1. Time is of the essence of contract. 2. When time not essence of the contract. 3. When contract is voidable and goods are accepted.

TERMINATION & DISCHARGE OF CONTRACTS 1. By performance.

a) Actual performance. b) Offer to perform.

2. By supervening impossibility (Doctrine of frustration)

a) Impossibility at the time of the contract b) Subsequent impossibility 1: Destruction of the subject matter. 2: Foundation of the contract ceases to exist 3: Change of law 4: Death or personal incapacity

3. Mutual agreement:
A) Novation B) Alteration C) Recission D) Remission E) Waiver F) Merger

3. By lapse of time 4. Operation of law:

a) Insolvency b) Material alteration c) Merger

5. Breach:
a) Actual breach. b) Anticipatory breach. i) ii) Express breach Implied breach

Effects of anticipatory breach: In anticipatory breach the promisee has following courses of action: a) The promisee is excused from performance. b) May treat the contract as rescinded and sue for damages immediately. c) May ignore the conduct of the promisor; wait till the time of actual performance and then sue in case of failure.