FREE CONSENT

BUSINESS LAW
GROUP MEMBERS
 ALI SHAHID ( 084232-041 )

 FAIZA KARAMAT ( 084232-007 )

 QURAT_UL_AIN MEHMOOD ( 084232-014)

 SADAF TASLEEM ( 084232-053 )

 AMMAD UMER ( 084232-020 )

FREE CONSENT
 SECTION 14 OF CONTRACT ACT 1872

“ The consent is said to be free when it is not

caused by:-
 Coercion
 Undue Influence
 Fraud
 Misrepresentation
 Mistake
 Consent is Not Free

Circumstances when consent is not free

Consent is Not Free

When Caused By

Coercion Undue influence Fraud Misrepresentation Mistake

AGREEMENT VOIDABLE AGREEMENT VOID

FREE CONSENT
 CONSENSUS AD IDEM
Both parties should agree to the same thing
in the same sense.

 NO CONSENT SO NO VALID CONTRACT

If there is no consensus ad idem among the
contracting parties. There is no consent and
therefore void contract.
COERCION
 Section 15 of Contract Act 1872 defines
coercion as
 “ Coercion is the committing or threatening to
commit, any act, forbidden by the law, 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 ”.
ESSENTIALS
An act will amount to coercion if the following
essentials are fulfilled:-
 There must be clear utterance of threat.
 The threat should be to commit any forbidden
act.
 It must be uttered with the intention of
causing the other party to enter into an
agreement.
EXAMPLE OF COERCION

W threatens to shoot M, if he does not give

his house on rent. M agrees. The consent of
M has been obtained by coercion. The
contract is voidable at the option of M.
UNDUE INFLUENCE
 Section 16(1) of Contract Act 1872:-

“A contract is said to be induced by undue

influence where the relations sustaining
between the parties are such that one of the
parties is in a position to dominate the will of
the other, and uses that position to obtain an
unfair advantage over the other”.
ESSENTIALS
Essentials of undue influence:-
 The dominant party uses his dominant
position.
 The relation existing between the parties
should be such that one or the other party is
in a position to dominate the will of the other.
 The dominant party obtains an unfair
advantage over the other.
EXAMPLE OF UNDUE INFLUENCE

“A, a police officer bought a property

worth Rs.1 Lac for Rs.5,000 from B, an
accused under his custody. Later on B sued
to cancel the contract on the ground of undue
influence. Here A, a police officer is in a
position to dominate the will of B( the
accused).”
FRAUD
 DEFINING FRAUD:

“Fraud means, acts committed by a party with

intent to deceive another party or to induce
the other party to enter into the contract”.
ESSENTIALS OF FRAUD
The following are the essentials of fraud:-
 The representation must be false.
 The representation must have been made to
induce the other party to enter into a contract.
 The representation must have been made with the
knowledge of its being false.
 The other party must have relied upon the
representation.
 The other party must have suffered a loss.
EXAMPLE OF FRAUD
MERE SILENCE NOT FRAUD:

“ A vendor who sells an unsound horse but says nothing about its
quality commits no fraud.”

In such cases there is no duty to speak and silence does not

amount to fraud. Similarly there is no duty to disclose the facts
that both parties are aware of.
MISREPRESENTATION
 Defining Misrepresentation

“An innocent misstatement of fact about the

contract, made by one party to induce the
other party to enter into a contract.”
ESSENTIALS OF MISREPRESENTATION

Following are the essentials of

misrepresentation:
 The representation should be made
innocently and believing it to be true.
 The representation must be untrue.
 It must be made without any desire to deceive
the other party.
 The other party must suffer a loss.
EXAMPLE OF MISREPRESENTATION

 In a contract of sale of motorcycle the seller

made a representation that it is free from
defects. But in fact there was an inherent
defect in the motorcycle. The buyer due to
mistake purchased the motorcycle. There is a
misrepresentation.
MISTAKE

“ The term mistake is used in contract law to

describe a situation in which one or both
parties to an agreement acted under an
untrue belief about the existence or
nonexistence of a material fact.”
ESSENTIALS
The following conditions must be fulfilled;

 There must be a mistake as to the formation

of the contract.
 It must be mistake of fact.
 It must be about a fact essential to the
agreement.
KINDS OF MISTAKE OF FACT
Mistake cases are classed as mutual or unilateral,
depending on whether both or only one of the parties
were acting under a mistaken belief.
 BILATERAL MISTAKE:
Where both the parties to an agreement are acting under
mistake. Where there is a bilateral mistake the agreement
is void.
 EXAMPLE:
“ A contracts B to sell his car. Both the parties thank it is in
A’s garage. Actually the car was stolen before the
agreement. The agreement is void.”
EXAMPLE OF MISTAKE

 UNILATERAL MISTAKE:
When in a contract only one party is at
mistake regarding the terms of the
agreement.
 EXAMPLE:
“ A wants to contract only with B, but makes a
contract with C; believing him to be B.”
THANK
YOU!!