CONSENT

 Consent Means An Act Of Assenting To An Offer. An Agreement

Is Valid When It Is Made With Free Consent Of The Parties.

 According To Section 13, Two Or More Persons Are Said To Be

Consent When They Agree Upon The Same Thing In The Same
Sense.
CONSENT
 Free Consent
 According To The Section 14, Consent Is Said To Be Free When
It Is Not Caused By:
 Coercion,
 Undue Influence,
 Fraud,
 Misrepresentation, Or
 Mistake.
 A Contract Without Free Consent Is Voidable Contract.
Free Consent
 Flow in Consent

Flaw in consent

Coercion Undue influence Misrepresentation Mistake

(sec15) (sec 16) (sec 17,18) (sec 20,21)

Innocent or
Faudulent or wilful Mistake of fact Mistake of law
Unintentional
(sec 17) (sec 20) (sec 21)
(sec 18)
Coercion

 SECTION 15 –coercion is committing or

threatening to commit any act forbidden by the
Pakistan Penal code, or the unlawful detaining
or threatening to detain any property to the
prejudice of any person ,whatsoever with the
intension of causing any person to enter into an
agreement .
Coercion

 Coercion can be analyzed as follows:

1. Commit or Threat to Commit,
2. Detain or Threat to detain property,
3. Threat to Third Party,
4. Enforcement of Pakistan Penal Code.
Examples:
1) W threatens to shoot M, if he does not give his house
on rent. M agrees. The consent of M is obtained by
Coercion.
2) An agent refused to hand over the account book to
the new agent unless the principal released him of all
liabilities. The principal gave a release deed. It was
held that release deed was given under coercion.
3) B threatens to kidnap B’s son if he does not give him
Rs. 2 Lac. B agrees. The agreement is made by
coercion.
4) C forced M to enter into an agreement on a ship near
Jeddah. Afterwards, M sued C for breach of contract
at Karachi High Court. C employed coercion although
Pakistan Penal Code was not in force at Jeddah.
Is Threat to commit
suicide coercion?
 Evena threat to commit suicide is
coercion even though it is not
punishable under the Pakistan penal
code .
 Example: A man by giving a threat to
commit suicide induces his wife and son
to execute a deed in favour of him in
respect of certain property and they
execute. Held that the consent of the
wife and son has obtained through
coercion.
Effect of coercion
Section 19, 64 & 72
 When the consent of a party to an agreement is obtained
by coercion ,the contract becomes voidable at the
option of the party ,whose consent is so obtained

 The burden of proving that the consent was obtained

through coercion shall be upon the party who wants to
set aside the contract on the plea of contract.
Effect of coercion
Section 19, 64 & 72
Example of effect of
coercion
 Fahadexecutes a transfer bond for the house
under fear of assault .it will be a contract
voidable at the option of Fahad since his
consent was obtained by coercion..

A railway company refuses to deliver up

certain goods to the consignee, except upon
the payment of an illegal charge for carriage.
The consignee pays the sum charged in order
to obtain the goods. He is entitled to recover
so much of the charge as was illegally
excessive.
UNDUE INFLUENCE-
section16
 The term Undue influence means unfair use of
one’s superior power in order to obtain the
consent of person who is in a weaker position.
It is described under section 16 (1&2).
 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:
 The relations subsisting between the parties
are such that one of the parties is in a position
to dominate the will of other.
UNDUE INFLUENCE-
section16
Example of undue
influence
 U a spiritual adviser, induced his follower M to
gift him his property to secure benefits in the
next world. It was held that gift was obtained by
undue influence as U was in a position to
dominate.
Following are the parties
that can be affected by
undue influence

 Doctor and patient

 Lawyer and client
 Guardian and ward
 Teacher and student
Decided case on undue
influence
 In karnal Distillery Co. ltd V. Ladli prasad .1958
Punj 190,confirmed by the supreme court in
1963 S.C 1279,the elder brother was shown to
have exercised undue influence over his
younger brother in respect of a compromise
arrangement the transaction was held to be
voidable at the instance of the younger brother.
Difference between
coercion and undue influence

Coercion Undue Influence

The consent of the aggrieved party The consent of the aggrieved party
is taken by committing or is obtained by dominating the party
threatening to commit an act by taking an unfair advantage of
forbidden by Pakistan penal code. his position.
Meaning of fraud

 Misrepresentation of facts may be intentional or

innocent. Intentional misrepresentation has
been termed as Fraud and innocent
misrepresentation has been termed simply as
‘misrepresentation’
in the contract act
Definition under law
section 17
 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 involvement or by his
agent with intent to deceive another party
thereto or his agent or to induce him to
enter into contract:
(a) An active concealment of a fact by one
having knowledge or belief of the fact.
(b) Any other act fitted to deceive
(c) A promise made without any intention of
performing it
There must be false representation
Peek vs Gurney(1873) L.R 6 H .L 377

The prospectus of a company did not refer to the

existence of a document disclosing liabilities.
This gave the impression that the company was
prosperous. If the existence of the document
had been disclosed the impression would have
been quite different. Held, non disclosure
amounted to fraud and anyone who purchased
shares on the faith of this prospectus could
avoid the contract.
The representation must relate to
material fact
Bisset vs Wilkinson (1972) A.C 177

 The vendor of a piece of land told a prospective purchaser

that, in his opinion the land would carry 2000 sheep. In fact
the land could carry only a number less than this. Held
there was no misrepresentation as the statement was one
of opinion which was honestly held
Examples of fraud

 Ahmed was induced to buy shares in a

company on account of a false statement
made by a stranger. It was held that he could
not get out of the bargains because false
statement was not made by the company or
its agent.
 Amirsays to Faraz his coat is made of pure
wool ,though he knows that it is untrue .Faraz
purchases the coat believing Amir’s
statement to be true ,It is a fraud by Amir
and therefore contract is voidable at Faraz’s
option.
Decided case on
silence is not a fraud
 Hands vs Simpson, fawcett & co ltd (1928) 44T LR
295
H a commercial traveller, obtained an employment
with S. S regarded driving as an essential part of H’s
duties but he did not specifically ask H if he is
qualified to drive a car.
H kept quiet about his disqualification to drive a car. S
contended that H’s silence is misrepresentation. But it
was held that H was under no duty to volunteer the
information and there was no misrepresentation.
Essentials of fraud
 The act must have been committed by a party to
the contract or with his involvement or by agent
.It should not have been committed by a stranger

 The act must have been committed with the

intention of inducing the deceived party to act
upon it-It implies that the statement should be
such that it would necessarily influence and
induce other party to act

 Plaintiff must have suffered

Effect of Fraud

 Section 19=The party whose consent to the

contract is obtained by fraud can exercised any
of the following rights:
 He may avoid the contract and may
 (i) ask for the damages suffered because of the
non fulfillment of the contract
 (ii) He may insist for the performance of the
contract .
Examples of fraud

a) A sells, by auction, to B, a horse which A knows to be

unsound. A says nothing to B about the horse's
unsoundness. This is not fraud in A.

b) B is A's daughter. Here, the relation between the

parties would make it A's duty to tell B if the horse, is
unsound.

c)A and B, being traders, enter upon a contract. A has

private information of a change in prices which would
affect B's willingness to proceed with the contract. A is
not bound to inform B.
Misrepresentation

 Misrepresentation is a false
representation made innocently without
any intention of deceiving the other
party .It may include two things:
 (a)wrong statement of a material fact
not known to be false
 (b) Non-disclosure of facts where there
is a legal duty to disclose without
intention to deceive
 SECTION 18
Difference between fraud and
misrepresentation
Misrepresentation fraud
There is no intention to In fraud the false statement
deceive or to gain any is made deliberately with a
undue advantage clear intention of deceiving
the other party
It makes the other contract In fraud the injured party
only voidable at the option besides avoiding the
of the party whose consent contract may also claim the
has been so caused damages.
Mistake
Mistake of law

 Mistake of law is further divided into two

categories
 (a) mistake of Pakistani law
 (b) mistake of foreign law
Mistake of fact

 Bilateral mistake
 Unilateral mistake
Bilateral mistake
Unilateral mistake
Unilateral mistake

 In other words, One party to a contract is under a mistake

of fact, the contract is voidable .unilateral mistake do not
affect the validity of contract unless they concern some
fundamental

 Example:
A agreed to buy certain wheat from B believing
that they were old. In fact wheat offered were new. It was
held that A could not avoid the contract on the ground that
he had a mistaken impression as to the oldness of wheat.