According to the Indian Contract Act, 1872, consent is when two or more persons agree upon the same thing in the same sense. To create a legal relationship between two parties to a contract, they must agree to the same thing in the same sense. Here, an agreement will be completed only when both parties to the contract agree or are ready to perform a contract in the same sense or harmony. For free consent in a contract, both parties to the contract should commit to the same thing and must show mutual trust between them.
According to Section 15 of the Indian Contract Act, 1872, “Coercion is the committing or threatening to commit, any act forbidden by the Indian Penal Code, or the unlawful detaining or threatening to detain, any property, to the prejudice of any person whatever, with the intention of causing any person to enter into an agreement.”
Geeky Takeaways:
- Consent is the most fundamental component of any contract. Contracts work on the principle of consensus ad idem, which means the meeting of minds.
- Two or more people are said to have given consent for a contract when they agree upon the same thing in the same sense.
- Consent is required to make the contract a fruitful junction between the two parties.
- The act makes sure that under the contract, none of the parties shall have any undue advantage over the other.
- Different things can affect the consent of any party to the contract; they can be either coercion, fraud, misrepresentation, or undue influence.
What is Coercion?
Section 15 of the Indian Contract Act, 1872 states that coercion means committing, or threatening someone to commit, any such act which is strictly prohibited by the Indian Penal Code, or any kind of unlawful detention or threat to detain any property of any person, with the main intention of causing harm or threat to a person so that it could influence him or her to enter into an agreement. The burden of proof in cases of coercion lies on the party taking the defense of the coercion. The burden of proof on him is heavier, as mere probability or suspicion doesn’t amount to coercion under the eyes of the law. To establish that the consent was affected by coercion, the party must prove that there was a threat that was forbidden by law and that it caused and influenced him/her to enter the contract against his/her will, and he wouldn’t have contracted otherwise.
Examples of Coercion:
- Vinay owns a car. Raghu approached Vinay along with two strangers and, at gunpoint, asked Vinay to give him possession of his car. In this case, the consent of Vinay is obtained by coercion, and as the consent is not free, the contract shall be void, and it will have no legal effect.
- X threatens to kill Y if Y does not sell his house to X at a low price. Y agrees to sell his house to X out of fear. This is a contract induced by coercion and Y can rescind it later.
- A unlawfully detains B’s car and demands that B signs a promissory note in his favor. B agrees to sign the note to get his car back. This is a contract induced by coercion and B can rescind it later.
What is Free Consent?
Section 14 of the Indian Contract Act, 1872 provides that consent is said to be free when it is not caused by any of the following:
When consent to an agreement gets affected by either of any elements like coercion, fraud, misrepresentation, or undue influence, the agreement will be treated as a contract voidable at the option of the party whose consent was compromised due to coercion, fraud, misrepresentation, or undue influence. When the consent is affected by mistake, the contract will be considered void.
In the Indian Contract Act, 1872, the definition of consent is given in Section 14, which states that “It is when two or more persons agree upon the same thing in the same sense.”
For example, Dhruv agrees to sell his mobile phone to Kavya. Dhruv owns three phones and wants to sell his Samsung phone to Kavya, but Kavya thinks she is buying her iPhone. Here, Dhruv and Kavya have not agreed upon the same thing in the same sense. Therefore, there is no consent and no contract has been established between Dhruv and Kavya.
Case Laws under Coercion
1. Chikham Amiraju v. Chikham Seshamma (ILR (1918) 41 Mad 33, 36: In this case, a person threatened the wife and son of the plaintiff to commit suicide if they did not execute a release deed of property in favor of the plaintiff’s brother. Due to this intimidation, the wife and the son released the deed by coming under the threat of suicide and entering into a contract against their will. The Hon’ble Court held that as the consent was taken involuntarily, the contract would be voidable. The court further decided that the threat to commit suicide comes under the Indian Penal Code, and committing any such act that is forbidden by the IPC will amount to coercion under Section 15 of the Indian Contract Act, 1872.
2. Askari Mirza v. Bibi Jai Kishori (1912) 16 IC 344: In this case, a minor borrowed a loan on two mortgage deeds, and he agreed to compromise. Subsequently, he pleaded that he entered into the compromise against his will because he was threatened with prosecution for falsely misrepresenting his age and that this amounted to coercion and the contract should be void. It was held that the law in Section 15 is much wider than anything to be followed in English authority and India. It is not correct to say that a contract is vitiated merely because a threat to bring a criminal charge was given, and the court established that threatening with criminal prosecution will not amount to coercion.
3. Ranganayakamma v Alwar Setti 4 I.D (N.S.) 861, (1890)ILR: In this case, the widow was prohibited from removing the corpse of her husband until she consented to the adoption of a boy of 13-year-old. The court established that her consent was not free and it was coerced. Coercion is committing or threatening to commit any act which is contrary to law.
4. Barton v Armstrong and others 1976 AC 104 (PC): In this case, the plaintiff and defendant respondents were shareholders in a company. The plaintiff alleged that Armstrong and other shareholders executed some deeds relating to the sale of certain companies by coercing him by threatening to murder him. The plaintiff argued that the executed deed shall be considered void, as he executed such a deed against her will due to the threat of murder. The Privy Council allowed the appeal. The appellant was not required to show that he would not have entered the contract had the threats not been made. It was sufficient that the threat operated on his mind or ‘contributed’ to his decision, his state of mind was declared as “very real mental torment”. This was the case on these facts, so the contract was void.
Effects of Coercion
The Indian Contract Act, 1872 has established that the effect of coercion is that the contract will be considered voidable. This means that the party whose consent was not free and whose consent was effected by coercion may choose to rescind the contract at his choice, and the aggravated party of the contract will decide whether he or she wants to perform the contract with the other party or wants to rescind the contract and nullify the contract. Also, in case any consideration was paid or goods were delivered under a contract that was affected by coercion, all such consideration or goods shall be repaid or returned once the contract is rescinded by the aggrieved party. However, the aggrieved party will have to prove that his or her consent was not freely given for the contract and that his consent was affected by coercion.
Conclusion
Coercion means compelling a person to enter into a contract against his will, either by force or threat. Coercion is considered one of the major factors that influence the decision of the party or individual to enter a contract by forcibly compelling him or her to enter the contract, which otherwise he or she wouldn’t have entered. The section of the act also enumerates a threat to criminal prosecution, which is not coercion. In cases of coercion, the burden of proof lies on the person whose consent was affected by coercion. Any contract under coercion is voidable at the option of the aggrieved party, and if any goods or monies were paid in a contract where consent was affected by coercion, then the money and goods are to be returned once the contract is rescinded.
Frequently Asked Questions (FAQs)
1. What is Consent?
Answer:
Consent is when two or more persons agree upon the same thing and in the same sense. So for creating a legal relationship between two people, they must agree to something in the same sense as well.
2. What is Free Consent?
Answer:
As per the provisions of Section 14 of the Indian Contract Act, consent is said to be free when it is not caused by coercion, fraud, undue influence, fraud, misrepresentation, or mistake.
3. What is Coercion?
Answer:
Section 15 of the Indian Contract Act, 1872 states that coercion means committing, or threatening someone to commit, any such act which is strictly prohibited by the Indian Penal Code, or any kind of unlawful detention or threat to detain any property of any person, with the main intention of causing harm or threat to a person so that it could influence him or her to enter into an agreement.
4. What is the effect of Coercion?
Answer:
The effect of coercion is that the contract will be considered voidable. This means that the party whose consent was not free and whose consent was effected by coercion may choose to rescind the contract at his choice, and the aggravated party of the contract will decide whether he or she wants to perform the contract with the other party or wants to rescind the contract and nullify the contract.
5. Does a threat of criminal prosecution amount to Coercion?
Answer:
In the case of Askari Mirza v. Bibi Jai Kishori, the court ruled that threatening with criminal prosecution will not amount to coercion. However, if it involves false charges, then it will fall under coercion.
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