Model Answer
0 min readIntroduction
A contract, a legally binding agreement, is founded on the principle of ‘free consent’ among the parties involved. Section 14 of the Indian Contract Act, 1872, defines ‘free consent’ as consent not caused by coercion, undue influence, fraud, misrepresentation, or mistake. When consent is not ‘free’ due to any of these factors, the contract becomes voidable at the option of the party whose consent was so caused. Understanding how each of these factors affects a contract is crucial for ensuring its enforceability and protecting the rights of the contracting parties. This answer will detail the impact of each vitiating factor on the validity of a contract.
Understanding 'Free Consent' and its Vitiating Factors
As per Section 14 of the Indian Contract Act, 1872, free consent implies a genuine and voluntary agreement. However, several factors can undermine this freedom, rendering the contract vulnerable. These factors are:
1. Coercion (Section 15)
Coercion involves compelling someone to enter into a contract through physical force or a threat of such force. If a contract is entered into under coercion, it is voidable at the option of the party whose consent was coerced. The threat must be of something that would cause harm to the person, their property, or the person they are responsible for.
Example: A threatens to shoot B if he doesn’t sell his property for a nominal sum. The contract is voidable at B’s option.
2. Undue Influence (Section 16)
Undue influence arises when one party dominates the will of another due to a position of trust or authority. This dominance is used to obtain an unfair advantage. Contracts entered into under undue influence are also voidable at the option of the weaker party. A relationship of trust (e.g., doctor-patient, lawyer-client, parent-child) is often a prerequisite.
Example: An elderly person, heavily reliant on their caretaker, transfers property to the caretaker at a significantly undervalued price. This contract can be challenged on grounds of undue influence.
3. Fraud (Section 17)
Fraud involves intentional misrepresentation of facts with the intent to deceive. It includes active concealment of facts or any other deceptive act. A contract induced by fraud is voidable at the option of the defrauded party. The defrauded party can also claim damages.
Example: A sells a horse to B, concealing the fact that it is unsound. B discovers the defect after the sale. B can rescind the contract and claim damages.
4. Misrepresentation (Section 18)
Misrepresentation is an untrue statement of fact made innocently, believing it to be true. Unlike fraud, there is no intention to deceive. A contract induced by misrepresentation is voidable at the option of the misled party. However, the misled party is not entitled to claim damages, unless the misrepresentation was fraudulent.
Example: A believes his land is fertile and tells B so. B buys the land based on this belief, which turns out to be false. The contract is voidable at B’s option, but B cannot claim damages unless A knew the land was infertile.
5. Mistake (Section 20-22)
Mistake can be either bilateral (both parties are mistaken about the same essential fact) or unilateral (only one party is mistaken).
- Bilateral Mistake: If both parties are mistaken about a fundamental fact essential to the contract, the contract is void ab initio (from the beginning).
- Unilateral Mistake: Generally, a unilateral mistake does not render a contract voidable, unless the other party knew or should have known about the mistake.
Example (Bilateral): A and B agree to sell and buy a ship believing it to be in a port when it has already been lost at sea. The contract is void.
Remedies Available
When a contract is affected by any of these vitiating factors, the aggrieved party generally has the following remedies:
- Rescission of the Contract: Cancelling the contract and restoring the parties to their original positions.
- Damages: Claiming compensation for losses suffered (primarily in cases of fraud or misrepresentation).
- Voiding the Contract: Declaring the contract invalid and unenforceable.
Conclusion
In conclusion, ‘free consent’ is a cornerstone of a valid contract under the Indian Contract Act, 1872. Factors like coercion, undue influence, fraud, misrepresentation, and mistake significantly impact a contract’s enforceability, rendering it voidable or even void. Understanding these vitiating factors and the remedies available to the aggrieved party is crucial for upholding contractual fairness and protecting individual rights within the legal framework. A thorough assessment of consent is therefore paramount before entering into any contractual agreement.
Answer Length
This is a comprehensive model answer for learning purposes and may exceed the word limit. In the exam, always adhere to the prescribed word count.