Essential Elements Free Consent

Fraud and Misrepresentation

 Misrepresentation is a mis-statement of a material fact made innocently or nondisclosure of a material fact without any intent to deceive the other party Fraud exists when it is shown that a false representation has been made knowingly, or without belief in its truth or recklessly

 A by misrep. Leads B erroneously to believe that 500 tonnes of cement are made annually at his factory. B examines the accounts of the factory which show that only four hundred tonnes have been made. After this B buys the factory Will B be able to claim the damages? No (Ordinary Diligence)

 B before letting his house, a landlord failed to tell the tenant that it was in a ruinous condition. The tenant suffered material losses. Was B liable in deceit? No (Silence as to facts There is no active concealment Filling a crack on the surface of a table by filling it and repolishing it)

MISTAKE
An erroneous belief about something May be a mistake of law (Ignorantia non excusat) or mistake of fact (Bilateral or Unilateral) Bilateral mistakes will make the agreement void Unilateral mistake will not make the contract voidable

 A agreed to sell a cargo of corn supposed at the time of the contract to be in transit from India to Australia. Unknown to the parties the corn had become fermented and had already been sold by the master of the ship at Srilanka. Will the buyer be liable to buy? No. (Bilateral mistake)

 A who inspected fifty rifles in Bs shop inquired from him the price of the rifles. Later he wired B, send three rifles By mistake of the telegraph clerk the message transmitted to B was send me the rifles. B sent 50 rifles. A, however accepted three rifles and sent back the rest. Can B ask for payment for all 50 rifles? No. (Bilateral mistake) Can get the three rifles paid (implied contract)

 C wrote to W offering to sell certain property for Rs. 1,250. He had earlier declined an offer from W to buy the same property for Rs. 2,000. W who knew that this offer of Rs.1250 was a mistake of Rs. 2,250, immediately accepted the offer. Can W enforce the contract No. (mutual mistake as to the price of the subject matter)

 A offers to sell his house to B for an intended sum of Rs.44,000. By mistake he makes an offer in writing of Rs.40,000. A buys an article thinking that it is worth Rs.1000 when it is worth only Rs.50. Can A claim innocence No. (Unilateral mistake)

Exceptions to Unilateral mistake

S wanted to go to the first show of a film. B the managing director of the theater gave instructions that a ticket was not to be sold to S as he had in the past published virulent criticism of the film. S knew this. He asked on of his friends to buy a ticket for him He was however refused admission Can S enforce the contract No. Mistake as to the identity B never intended to contract with S

 M an old man of poor sight, endorsed a bill of exchange thinking that it was a guarantee. Can he be forced to enforce the contract No (Mistake as to the nature of the contract)