FREE CONSENT

Acc. to Section 10 free consent is an essential requirement of a contract. It states

that: “All agreements are contracts if they are made by the free consent of parties
competent to contract, for a lawful consideration and with a lawful object, and
are not hereby expressly declared to be void.
Nothing herein contained shall affect any law in force in India, and not hereby
expressly repealed, by which any contract is required to be made in writing or in
the presence of witness, or any law relating to the registration of documents .”
DEFINITION OF FREE CONSENT
Section 14 of Indian Contract Act defines the free consent. It states that: “Consent
is said to be free when it is not caused by:
1. Coercion, as defined in Section 15, or
2. Undue influence, as defined in Section 16, or
3. Fraud, as defined in Section 17, or
4. Misrepresentation, as defined in Section 18, or
5. Mistake, subject to the provisions of Section 20, 21 and 22.
Consent is said to be so caused when it would not have been given but for the
existence of such coercion, undue influence, fraud, misrepresentation or
mistake.”
VITIATING FACTORS AND THEIR EFFECT
Where consent to an agreement is caused by coercion, undue influence, fraud or
misrepresentation, the agreement is a contract voidable at the option of the party
whose consent was so caused. Voidable contract is defined under Section 2(i)
which states that “an agreement which is enforceable by law at the option of one
or more of the parties thereto, but not at the option of the other or others, is a
voidable contract.”
If the contract made by the parties is under mistake, the agreement is said to be
void. Void agreement is defined under the Section 2(g). It states that: “An
agreement not enforceable by law is said to be void.”
Section 15 of the INDIAN CONTRACT ACT, 1872, defines coercion as follows -
Coercion is committing or threatening to commit an act that is prohibited by IPC, or any
unlawful detaining or threatening to detain, any property, to the prejudice of any person
whatever, with an intention of causing any person into entering a contract.

1. Explanation- It is immaterial whether IPC is in operation at a place where such act took
place.
2. Illustrations-
a. A threatens B at gun point to sell his land to A.
b. A while in an English ship on high seas enter into a contract with B by intimidating B
that is unlawful in India. Later on A sues B of breach of contract in Calcutta. This is
coercion.

WAYS IN WHICH COERCION MAY BE COMMITTED

Thus, as is clear from the definition, coercion may be committed in two ways-

a. By committing acts forbidden by IPC

This may include obtaining of consent at gunpoint, or threatening to burn a person’s house, with
an intention to make a person enter into the agreement. There are two most important cases on
this-

 Chikham Amiraju vs Chikham Seshamma, 1918 - Husband threatened to suicide

unless wife gave property to his brother. This was held coercion.

 Askari Mirza vs Bibi Jai Kishori 1912– A minor in a mortgage deed was threatened to
make a compromise, otherwise he was to be prosecuted for false misrepresentation of
his age. He subsequently brought a suit. It was held that: “Threatening a criminal
prosecution is not coercion per se. It could be coercion if the threat is to file false
charges.”

b. By illegal detention of property

This may include unlawful detention or threating to detain property to make the other party enter
into an agreement. The most important case on this is-
  Astley v Reynolds, 1731 - Plaintiff had pledged his place for $10. When he went to
take it back, pledgee asked for $10 more. He paid the additional $10, but sued to get
recover it back. It was held coercion.

DIFFERENCE IN POSITION OF ENGLISH AND INDIAN LAWS:

In English law, the word DURESS is used instead of COERCION. The main differences
between duress and coercion can be outlined as follows:

COERCION DURESS
Coercion revolves around any act against It covers any illegal act in general, be it tort,
IPC, i.e. a specific penal code. or crime.
Coercion may be against the person of the Duress is always against the person of a
party or its property. party or his near relative.
Coercion may be even against a stranger. Duress is always against the party, its child,
and parent or near relative.
Coercion may proceed from a non- party. Duress proceeds from a party to the
contract, or at least, at the time of contract
party should have knowledge of application
of duress.
SECTION 16 of INDIAN CONRACT ACT, 1872, talks about Undue Influence, as follows—

(1) “A contract is said to be induced by ‘undue influence’ where the relations subsisting
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.”
(2) In particular and without prejudice to the generality of the foregoing principle, a person is
deemed to be in a position to dominate the will of another—
(a) Where he holds a real or apparent authority over the other, or where he stands in a
fiduciary relation to the other; or
(b) Where he makes a contract with a person whose mental capacity is temporarily or
permanently affected by reason of age, illness, or mental or bodily distress.
(3) Where a person who is in a position to dominate the will of another, enters into a contract
with him, and the transaction appears, on the face of it or on the evidence adduced, to be
unconscionable, the burden of proving that such contract was not induced by undue
influence shall be upon the person in a position to dominate the will of the other.

ILLUSTRATIONS
(a) A having advanced money to his son, B, during his minority, upon B’s coming of age
obtains, by misuse of parental influence, a bond from B for a greater amount than the sum
due in respect of the advance. A employs undue influence.
(b) A, a man enfeebled by disease or age, is induced, by B’s influence over him as his
medical attendant, to agree to pay B an unreasonable sum for his professional services, B
employs undue influence.
(c) A, being in debt to B, the money-lender of his village, contracts a fresh loan on terms
which appear to be unconscionable. It lies on B to prove that the contract was not induced by
undue influence.
(d) A applies to a banker for a loan at a time when there is stringency in the money market.
The banker declines to make the loan except at an unusually high rate of interest. A accepts
the loan on these terms. This is a transaction in the ordinary course of business, and the
contract is not induced by undue influence.
ABILITY TO DOMINATE THE WILL OF THE OTHER
This is the sine qua non requirement for undue influence that the relationship between parties
is such that one is in a position to dominate the will of the other and does so, to make an
agreement. For example- A spiritual advisor inducing his devotee to devote all his property
to him, is clearly, undue influence. This came before Allahabad HC:
 Mannu Singh vsUmadat Pandey 1890 - Spiritual guru induced the plaintiff, his
devotee, to gift all his property to the guru.
Also, another major case on this is
 Williams vsBaylex 1866 – A son forged his father’s signature on several promissory
notes and paid them into banking account. Bank manager threatened prosecution of
son. Father, being afraid of bank manager, entered into a contract to mortgage his
house. This was held voidable, because the fears of the father were stimulated.

REAL or APPARENT AUTHORITY

Income tax officer in relation to assesse, magistrate or police officer in relation to the accused
can be examples of persons in authority.
Sometimes, the authority may not be real but if a person shows off as such then also it is
applicable.

FIDUCIARY RELATIONSHIP
Every relationship of trust and confidence is a fiduciary relationship.
For example;
Solicitor - client, doctor - patient, spiritual guru – devotee.
A contract made between such parties would be voidable if the consent was obtained by
abusing the consent of the other party.

MENTAL DISTRESS
A person is said to be in distress when his mental capacity is temporarily or permanently
affected. Such a person is easily persuaded to give consent to a contract which may be
unfavourable to him. The most important case law is:
  RaneeAnnapurnivsSwaminatha, 1910 - A poor widow who was in dire need to
money to establish her right to maintenance, was persuaded by a money lender to take
loan at the rate of 100%. It was held to be undue influence while a person was under
mental distress and the court reduced the rate to 24%.

BURDEN OF PROOF

The person must show that the other party was in position of dominating the will and that he
used that position to gain advantage.

PRESUMPTION OF UNDUE INFLUENCE

In certain cases, when it is established that the defendant was in a position to dominate the
will of the plaintiff, it will be presumed that he must have used his position to obtain an
unfair advantage. Thus, it will be up to the defendant to prove that the plaintiff freely
consented. For example,
 Lancashire Loans Ltd. vs Black, 1934: It was held that a daughter may not
necessarily be independent and may be under the influence of the mother.

The presumption of undue influence is raised at least in following cases:

A. Unconscionable bargains:
When one party is in a position to dominate the will of the other party and the contract is
apparently unconscionable, that is, unfair, the law presumes that consent must have been
obtained by undue influence.
 Wajid Khan vs Raja Ewaz Ali Khan, 1891 - An old illiterate woman conferred upon
her managing agent a big pecuniary benefit without any valuable consideration under
the guise of a trust. This was held to be under undue influence.

B. Inequality in bargaining power:

 Lloyd's Bank vs Bundy - Farmer pledged his farmhouse for securing a loan for his
son. Later bank tried to take possession of the house. It was held that the contract
might have been done under undue influence, because the bank exploited the
vulnerability of the father, caused by his desire to help his son.
C. Contracts with Pardanashin women:
A pardanshin woman is one who is “secluded from social intercourse”.
A contract with a pardanashin woman is presumed to have been induced by undue
influence. However, such a woman must be totally secluded from ordinary society. In the
case of Ismail vs Amir Bibi, 1902, a lady stood as witness, put tenants, collected rents in
respect of her house. She was held not a pardanashin woman.
Once it is shown that a contract is made with a pardanashin woman, the law presumes
undue influence, and the burden of proof lies on other party to show that no undue
influence was used.
 Chand Singh v Ram Kaur, 1987- When a pardanashin lady of 70 years, having three
daughters, was supposed to have gifted her entire land to the defendant, who was the
tenant of that land, it was held that from the position of his possession of the land he
must have dominated the woman.

DIFFERENCE BETWEEN COERCION AND UNDUE INFLUENCE

COERCION (Section 15) UNDUE INFLUENCE (section

16)
There is a clear threat involved and There is no outward sign on undue
the person being coerced knows it. influence and the person being
influenced may not realize it.

No relationship has to exist. A relationship that allows a person

to dominate the will of other must
exist.