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Submitted To: Yasar Hameed

Subject: Law and Taxation

Assignment: 2
Explain the concept of Free Consent?

For a contract to be valid, the consent of the parties must be free and genuine. The principle
followed in making a contract valid says the parties entering the contract must mean an
equivalent thing within the same sense. The parties to the contract must have a similar
understanding regarding the topic of the contract. Only consent isn’t enough for a contract to be
enforceable. The consent given must be free and voluntary from all the forces.
One of the essentials of a valid contract mentioned in Section 10 is that the parties should enter
into contract with free consent. Section 13 defines the term consent. According to this Section,
two or more persons are said to consent when they agree upon the same thing in the same sense.
Agreed upon the same thing in the same sense at the same time.
Free consent in a contract is said to be duly given when it’s not under the existence of any kind
of coercion, undue influence, fraud, misrepresentation, or mistake.
This principle aims to make sure that the judgment of the parties while entering the contract
wasn’t ambiguous. Therefore, the consent was given under:
1. Coercion
2. undue influence
3. fraud
4. misrepresentation
5. the mistake
Has the potential to invalidate the contract.
The consent given by a party would be invalid if:
 Coercion: If consent is under Coercion. ‘Coercion’ is that the act of 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 bias of a person desiring to cause
a person to enter an agreement.”
Effect: When the agreement made is found to be made out of coercion, then the contract
would be rescinded or cancelled, due to which both parties are released from their
obligation to perform their duties as per the contract.
 Undue Influence: When the parties to the contract are in relationships in such a way that
one party can dominate the will of the other and uses the unfair advantage so gain or to
get the consent of the other party, then the consent is said to have been obtained by undue
influence. “A” an old person appoints “B” as his attendant and “B” is his nephew as well.
“B” demands a share of his property and “A” agrees to pay him. In this situation, “A” is
under the undue influence of “B”. The principle of undue influence is based on the
doctrine of equity.
 Fraud: Consent is not free when a person gets it by using means of fraud. “A” agrees to
sell his horse to “B”. “A” had the knowledge that the horse is of unsound mind and did
 not inform it to “B”. “B”, asked “A” if he does not deny the fact then “B” would consider
the horse to be sound and “A” kept silence to it. In this case, mere silence amounts to the
agreement, thus “A” performed a fraudulent act. Characteristics: When a party conceals
the fact from the other party. When a party promises to perform an act for the other party
but has no real intention to fulfil the promise. The false representation of facts has been
made to enter into the contract.
 Misrepresentation: When consent was obtained through misrepresentation, it becomes
voidable at the option of the party whose consent was so obtained. Characteristics: It
should be mentioned that the false statement was of material fact and not mere words.
When a party makes a misrepresentation to the other party, it should be proved that at the
party believed the fact to be true. The party should have misrepresented the facts to
induce the other party to enter into a contract.
 Mistake: When one party has given its consent to the contract under some kind of
misunderstanding then the consent is said to be given by mistake.
Elements of free consent
 Consent is considered to be free consent when the following factors are satisfied:\
 It should be free from coercion.
 The contract should not be done under the pressure of undue influence.
 The contract should be done without fraud.
 The contract should not be made through misrepresentation.
 The contract should not be made by mistake.
Importance of free consent
 The contract made out of free consent protects the validity and enforceability of an
agreement.
 It provides a protecting shield to the parties from coercion, undue influence,
misrepresentation, fraud, and mistake
 It provides the parties to withstand their autonomous power to frame their running policy
or principle.
 The principle of consensus-ad-idem is followed.
Mistake in the free consent
A mistake is described as an element, which when occurs in a contract makes it void. There are
two types of mistakes, which occurs in a contract
Unilateral Mistake
A mistake is said to be unilateral when one party is mistaken in the agreement.
Mutual mistake
A mistake is said to be mutual when both parties misunderstood each other. Thus it shows that
there is a breach in the principle of consensus-ad-idem in the contracts and the contract is to be
considered as void. Illustration, “A” made an offer to “B” to sell his scooter. “A” intended to sell
his 3G scooter but “B” believed that “A” would sell his 4G scooter. Thus there was no proper
communication and the fact was mistaken. It would amount to an effective agreement.
Common mistake
Section 20 of the Indian Contract Act, 1872 lays down the provision for common mistakes. A
contract arising out of common mistake is considered to be void. This type of mistake is
possessed by both the parties but this mistake is not the result of mutual mistake, it arises
individually.
Free Consent means an act of assenting to an offer. According to section 13, "Two or more
persons are said to consent when they agree upon the same thing in the same thing in same
sense." Thus, consent involves identity of minds in respect of the subject matter of the contract.
In English Law, this is called 'consensus-ad-idem'.
Effect of Absence of consent:
When there is no consent at all, the agreement is void ab-initio, i.e. it is not enforceable at the
option of either party. Example: X has one Maruti car and one fiat car. He wants to sell fiat car.
Y does not know that X has two cars. Y offers to buy X's Maruti car Rs 50,000. X accepts the
offer thinking it to be an offer for his Fiat car. Here, there is no identity of mind in respect of the
subject of the subject matter. Hence there is no consent at all and the agreement is void ab-initio.
Meaning of Free consent: It is one of the essential elements of a valid contract as it is evidenced
by section 10 which provides that all agreements are contracts if they are made by the free
consent of the parties... according to section 14, consent is said to be free when it is not caused
by (a) Coercion, or (b) Undue influence, or (c) Fraud, or (d) Misrepresentation, or (e) Mistake.
Effect of Absence of free consent:
When there is consent but it is not free (i.e. when it is caused by coercion or undue influence or
fraud or misrepresentation), the contract is usually voidable at the option of the party whose
consent was so caused.

Free Consent is absolutely essential to make an agreement a valid contract. The importance of
free consent cannot be stressed enough. Consent of the parties to the contract must be free and
voluntarily. Consent to the contract has to be given without any kind of pressure or delusions. It
is important that the consent given by the parties is free as this can affect the validity of the
contract. If the consent to the agreement was obtained or induced by coercion, undue influence,
fraud, misrepresentation or mistake, then it has the potential to make the agreement void.