Free Consent : Meaning, Elements and FAQs

According to the provisions of the Indian Contract Act, 1872 the definition of Consent is provided in the Act. It establishes that it is when two or more persons agree upon the same thing in the same sense. So, in order to create a legal relationship between two people, they must agree to something in the same sense. Here, when both parties agree or are ready to perform a contract in the same sense or harmony, an agreement will be complete. As for Free Consent, both parties should commit to a single thing and must show mutual trust between both parties.

Geeky Takeaways:

• Two or more people are said to have consent when they agree upon the same thing in the same sense.
• Under the contract, one party should not have an undue advantage over the other, so consent is required to make the contract a fruitful junction between the two parties.

What is Free Consent under the Indian Contract Act?

As per the provisions of Section 14 of the Indian Contract Act, the Consent is said to be free when it is not caused by any of the following:

• Coercion (Section 15)
• Undue Influence (Section 16)
• Fraud (Section 17)
• Misrepresentation (Section 18)
• Mistake (Section 20)

When consent to an agreement is caused by either of any elements like coercion, fraud, misrepresentation, or undue influence, the agreement will be a contract voidable at the option of the party whose consent was so compromised. When the consent is caused by mistake, the contract will be treated as 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, Ishika agrees to sell her mobile phone to Disha. Ishika owns three phones and wants to sell her Samsung phone to Disha, but Disha thinks she is buying her iPhone. Here, Ishika and Disha have not agreed upon the same thing in the same sense. Therefore, there is no consent, and no contract established between Ishika and Disha.

Elements vitiating Free Consent

1. Coercion:

Section 15 of the Indian Contract Act, 1872 states that Coercion means committing, or threatening someone to commit, any act which is strictly forbidden by the Indian Penal Code. It also means unlawful detaining or threatening to detain any property of any person whatever, with the main intention of causing harm to any person to enter into an agreement. Now, the effect of coercion is that the contract is voidable. This means that the party whose consent was not free may choose to rescind the contract at his choice, and the aggravated party will decide whether he wants to perform the contract or rescind the contract. Also, if any consideration has been paid or goods are delivered under coercion, all such consideration or goods shall be repaid or returned once the contract is rescinded. The aggrieved party will have to prove that his consent was not freely given for the contract.

For example, Rohit owns a car. Rahul approached Rohit along with two strangers and at gunpoint asked Rohit to give possession of his car. In this case, the consent of Rohit is obtained by coercion.

2. Undue Influence:

Section 16 of the Indian Contract Act, 1872 states the definition of Undue Influence. It states that when the relations between the two parties are of a nature that one party is in a position to dominate the decision-making of the other party, and the party in the dominant position uses his influence to obtain an unfair advantage and unjust advantage of the other party such influence is called as Undue Influence.

A person is deemed to be in a position to dominate the will of another in cases where:

• One party holds a real or apparent authority over the other.
• One party stands in a fiduciary relationship with the other.
• One party makes a contract with a person whose mental ability for decision-making is temporarily or permanently affected by reason of his age, illness or mental or physical distress. For example, an old illiterate person.

Under Undue Influence, the dominant party must have the objective to take advantage of the other party. If influence is wielded for the benefit of the other party it will not be an Undue Influence. But in case, the consent is not free due to undue influence, the contract will be voidable at the option of the aggrieved party. In such a case, the burden of proof will be on the dominant party to prove the absence of influence.

For example, Anil, a student, agrees to pay ₹5,000 to his teacher, as he promised him to give better grades in examinations. Here, Anil is under the undue influence of his teacher.

3. Fraud:

Fraud means deceiving one of the parties deliberately by making false statements and claims. Here, one party misrepresents the other by having full knowledge that the said facts and figures are not true, or the claims are made recklessly without checking for trueness, this is called fraudulent, and it impairs free consent. According to Section 17 of the act, Fraud is done when one of the parties convinces another to enter into an agreement by making statements that are untrue and suggest a fact that is not true, even when the other party does not believe it to be true. Fraud can be done in any of the following ways:

• The active concealment of facts.
• Making promises without any intention of performing it.
• An act fitted to deceive the other party.

In case of Fraud, the aggrieved party should suffer from some actual loss due to the act of the other party, which evidences as fraud. There can be no claim of fraud in a case where no damage is caused to the aggrieved party. Also, the false statement must be a fact, not of personal opinion.

For example, Supriya showed interest in a bike which was owned by Gyan. Supriya inquired about the bike, but Gyan misrepresented the facts and features of the bike, and even after being aware that the engine of the bike was not working properly and was leaking, he concealed these facts and sold the bike to Supriya. Here, as Gyan was aware of the facts, he committed Fraud.

4. Misrepresentation:

As per Section 18 of the Indian Contract Act, 1872, Misrepresentation is committed when the truth is misrepresented. Misrepresentation is the expressing of deceiving details resulting in the presumption that the other party will enter into a deal and then lose due to believing misrepresented facts. Here, the information provided by the guilty party is the result of a genuine belief in the matter. Misrepresentation can be said to be committed. Misrepresentation is nothing but showing false information at the beginning of the contract itself. The facts which are committed at the ground level may not be reliable at all and hence, it is considered Misrepresentation of the contract. In this case, there can be Innocent Misrepresentation, and the other can be Negligent Misrepresentation. Misrepresentation can be of three types:

• When the person makes a positive assertion believing it to be true.
• When there is a breach of duty, it gives the person committing it an advantage by misleading another. But the breach of duty is done without any intent to deceive.
• When one party causes the other party to make a mistake as to the subject matter of the contract, but this is done innocently and is not a deliberate action to commit misrepresentation.

For example, A told B that his laptop was in good condition, and because of the confidence he had in A, B bought the laptop from him. The laptop did not work properly after some time, B thought he was misled by A, but A believed his laptop was in good condition as he got it serviced recently and had no intention of deceiving him. So, here Misrepresentation is in the part of A because he did not know that the laptop was not working properly.

5. Mistake:

There can be two forms of mistake under Indian Contract Law:

• Mistake of Fact
• Mistake of Law

A. Mistake of Fact:

A Mistake of Fact arises when either or both of the contracting parties have misunderstood the term that is essential to the meaning of the contract. Such a mistake can be caused due to confusion, negligence, omission, etc. A mistake is never intentional, it is just an overlooking. Such mistakes can be of two types either Unilateral or Bilateral.

I. Bilateral Mistake (Section 21): When both parties to a contract are under a mistake of fact which is essential to the agreement, such a mistake is known as a Bilateral Mistake. Bilateral mistakes are also referred to as mutual or common mistakes. In this case, all the parties do not agree to the same thing and in the same way, this means that the consent of none of the parties was there to create a contract. Since there was no consent, the contract is null and void.

II. Unilateral Mistake (Section 22): A unilateral mistake occurs when only one party to the contract makes the mistake. The contract will not be void in such a case, as only one party made the mistake. So if only one party has made a mistake, the contract remains a valid contract.

For example, A deals with B to sell one kg of milk, but milk is consumed by A’s son, here A contracted with B to sell the milk as he assumed that milk would have been available, as the fact was not known by any party the arrangement between them will be invalid.

B. Mistake of Law:

The mistake may be related to either the mistake of Indian laws or a mistake of foreign laws. If the mistake applies to Indian laws, the principle is that the law’s ignorance is not a good excuse. This means that either of the party cannot claim that he was not aware of the law and no party can claim any relief. This also extends to include an incorrect interpretation of any legal provisions. Whereas, Ignorance of foreign law provides some excuse. The parties are not expected to know foreign law and its meaning and an error of foreign law is rather treated as a mistake of fact.

Conclusion

Free Consent is essential to make an agreement a valid contract. The presence of Free Consent makes sure that the parties to the contract are thinking in the same way and the same sense so that no party to the contract can be deceived or take advantage of the other party. The party’s consent should be free and voluntary before entering any contract that is the reason why it is important to give consent to the contract without any pressure or delusions. When consent to an agreement is caused by either of any elements like coercion, fraud, misrepresentation, or undue influence, the agreement will be a contract voidable at the option of the party whose consent was so compromised. When the consent is caused by mistake, the contract will be treated as void. Free consent serves as an asset in the decisions of both parties as Free Consent emerges from the mutual trust and cooperation of both parties to the contract. This also gives rise to smooth functioning, and disputes and misunderstandings are reduced to a greater extent because if one party is willing to do something, the other party will co-operate.

Free Consent- FAQs

What is Consent?

The definition of Consent is provided in the act, which establishes that it 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.

What is Free consent?

As per the provisions of Section 14 of Indian Contract Act, the consent is said to be free when it is not caused by the coercion, fraud, undue influence, fraud, misrepresentation or mistake.

Which parties can be affected by Undue Influence?

The parties which are much affected by undue influence are listed below:

• Tender age
• Old age
• Doctor and patient
• Parent and child
• Lawyer and client
• Real and apparent authority

How Fraud is said to be committed?

Fraud can be done by following:

• The active concealment of facts.
• Making promises without any intention of performing it.
• Other such act fitted to deceive the other party.

Does mere silence amount to Fraud?

No, silence is not always considered as fraud. But in a case where the party is supposed to speak but instead he keeps silent of the fact and conceals it, then it does amounts to fraud. In this case, the other party has all the rights to enquire about the particular facts which are either hidden or are untold by the party. If a person continues to remain silent about such facts which are supposed to be known by other party, then it leads to fraud as it can harm the other party.

If Consent is absent, does the Contract remain valid?

When consent to an agreement is caused by either of any element like coercion, fraud, misrepresentation, or undue influence, the agreement will be a contract voidable at the option of the party whose consent was so compromised. When the consent is caused by mistake, the contract will be treated as void.