Presented by: Nousheen Abbas Naqvi

Business & Industrial Law

 Consent is said to be free when it is not caused by
coercion, undue influence, fraud, misrepresentation or
mistake.

 In other words if consent is obtained by coercion, undue

influence, fraud, misrepresentation, there is no free
consent, and contract is voidable at the option of
aggrieved party.
 Coercion
 Undue Influence
 Fraud
 Misrepresentation
 Mistake.
 It is committing or threatening to commit, any act,
forbidden by Pakistan Penal Code, 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.
 Value of House
is Rs.800,000

I want to buy I don’t want

your house in to sell it
Rs 300,000/=
 Oh! Okay… I
accept your
Now what offer 
you say ?

Contract signed
by both parties
Aggrieved party can
avoid the contract
and file suit against
dominant party
 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.
 Where he holds, a real or apparent authority over the
other.
 Where he stands in a fiduciary relationship to the other.
 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.
Value of House
is Rs.800,000
Prof Afraz :I want
Student: OK Sir  your House at
I accepts your offer Rs.600,000
Description Coericion Undue Influence

Nature Phsical threat Mental or moral threat

Illegal &Unfair Illegal Unfair

Penal Action yes No

Against the Contarcting parties Contarcting parties
Parties or some third party

Relation No specific relation specific relation

 Fraud means any of the following acts committed by a
party to a contract, or by his agent, with intent to
deceive or to induce another party thereto or his agent,
to enter into the contract:
1. The suggestion, as a fact, of that which is not true, by
one who does not believe it to be true.
2. Promise made without any intention of performing it
3.The active concealment of a fact by one having
knowledge or belief of the fact
4. Any other act fitted to deceive
5. Any act or omission as the laws specially declares to be
fraudulent.
 False representation
 Relates to the fact
 To induce the other party to enter in to a contract
 with the knowledge of its being false
 Representaion is made before the conclusion of contract
 Other part relied upon the representaion
 Other party must have deceived by the fraud
 Other party must have suffered loss.
 It means an innocent misstatement of facts about the
contract, made by one party to induce the other party to
enter into a contract.

 A wrong but innocent representation is called

misrepresentation .If a misrepresentation is made wrong
and intentionally ,it is said to be fraud.
 Innocent representation
 Relates to the facts essential to the contract
 To induce the other party to enter into a contract
 without the knowledge of its being false
 Representaion must be untrue
 Other part relied upon the representaion
 It must be made without any desire to deceive
 Other party must have suffered loss.
 In a void-able contract, the aggrieved party has
the right to file a case.
 If an aggrieved party is not been able to give the
restitution back, the contract become valid.
Description Fraud Misrepresentation

Intention to Yes No
deceive
Belief Doesn’t believe believes it to be
it to be true true
Damages Can be claimed Can not be claimed

Offence Yes No
 1. Mistake of Fact
 Bilateral
 Unilateral

 2. Mistake of Law
 Pakistani Law
 Foreign Law