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It's a well-known fact that this is the only law that is used in daily life,
whether intentionally or unintentionally. For example - 'A' goes to a
medical store to buy medicines, he, therefore, purchases the
medicine and gives the money to the store-owner as a part of the
consideration. Here the contract is said to be formed right after he
gives the money to the store owner and both of them will be bound
by any obligations arising out of the contract.
The first being consent is also the most important part of a valid
contract and it is mentioned under Section 13 of ICA, 1872.[3]
Consent is simple terms means parties involved in a contract agree
on the same thing in the same sense.
Sometimes while entering into a contract, the free consent may not
be there and the consent might be induced in an improper way which
may be forbidden by the law. Here the contract will be voidable at the
option of the aggrieved party and he will have the option of either
declaring the contract void or continuing with the contract as per the
earlier terms.
The court ruled that a reasonable person could not have known
which sailing had been agreed to in advance. As a result, the
contract was void because of no consensus ad idem.
The court held that the consent was taken involuntarily and
therefore the contract will be said to be voidable. The court
further decided that the threat to commit suicide comes under
IPC and committing any act forbidden by IPC will amount to
coercion under Section 15 of ICA, 1872.
:
Askari Mirza v Bibi Jai Kishori [8]
In this case, a minor mortgaged two properties and borrowed
money from a money lender. But a contract with a minor is
voidable. The moneylender threatened the minor that he would
prosecute him for misrepresenting his age if he didn't make a
compromise to which the minor agreed. The minor afterward
refused to pay to claim that the compromise was done under
the threat of criminal prosecution.
The court ruled that threatening with criminal prosecution will not
amount to coercion. However, if it involves false charges, then it will
fall under coercion.
Effect of Coercion
Under Section 19 of ICA, 1872, if the consent is induced by coercion
in a contract, then the party whose consent was forcefully taken has
the option to get the contract declared voidable by the court of law.
Voluntarily, or
Without believing its truthfulness, or
Recklessly careless whether it be true or false.
In the landmark case Derry v Peek [9], the court held that if a
person honestly thinks a fraudulent statement to be true, he or she is
not committing fraud. Therefore, only intentional misrepresentation
will amount to fraud. This case also cleared the blurred line between
misrepresentation and fraud.
Section 64 of ICA, 1872 states that when the aggrieved party, whose
consent was induced by fraud rescinds or cancels the contract then
the other party has no obligation to perform the contract. The party,
if benefited or received anything from the other party can restore
such benefit so as to put them back to the original place.
Conclusion
To sum up the above-mentioned facts with case laws related to the
Indian Contract Act, 1872, it is evident that why free consent
becomes one of the most essential elements of a valid contract and
how its voluntariness forms the very basis of a contract.
:
If the party whose consent is involuntarily taken by applying
coercion, undue influence, fraud, misrepresentation, or mistake of
fact then the consent will be held valid and the contract becomes
voidable at the option of the person whose consent was induced.
Lastly, the point to be noted is that the Indian Contract Act, 1872 also
includes acts or omissions which is not included in the sections due
to the fact that all types of acts cannot be covered under one
umbrella. To solve this problem, a residuary clause is also mentioned
in Fraud which covered certain other fraudulent activities not written
or mentioned there.
References:
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