FREE CONSENT & VOIDABLE

CONTRACT
 The identity of minds or consensus ad idem i.e. agreeing
upon the same thing in the same sense.
 One of the essentials of a valid contract

 Consent is said to be free when it is not caused by,

 Coercion
 undue influence
 fraud
 misrepresentation
 A…o…Consent…A….B
Consensus ad idem
 Meeting of two minds
A………B
Void …not binding under law
Suit
Voidable contract
VOIDABLE CONTRACT AND FREE
CONSENT
 In the absence of ‘free consent’, the contract may turn
out to be either voidable or void.
 Any party wanting to prove that his consent is not free
has to prove that if he had known the truth, he would not
have entered into the contract
VOIDABLE CONTRACT
 Voidable contract : Any contract that may be declared
void by any party to the contract through court is called
‘voidable contract’ - Section 518 (1)
 Any party who is affected by any contract made under
coercion or undue influence or misrepresentation or
fraud may make such contract void through court.
COERCION
 Section 518(2) (a) defines contract under coercion
 Coercion is said to be there when the consent of a person has
been caused either by
 Unlawful detaining or threatening to detain any property
 Threatening to harm the person's life
 Threatening to defame the person or
 committing or threatening to commit any act in
contravention to the law.
UNDUE INFLUENCE
 Section 518(2) (b) of Contract Act, 2056 defines a
contract in which undue influence is present.
 It defines ‘undue influence’ as a situation in which a
person intending to take unfair advantage for personal
benefit or selfishness influences a person who is under
his control or a person through whom any work may be
done as per will.
 It is a situation where the relation subsisting between the
parties are such that one of the parties is in a position to
dominate the will the other and uses the position to
obtain an unfair advantage over the other.
  A……………….B
 Dominate the will of other person
UNDUE INFLUENCE
 The following persons are said to be within one’s influence or
through whom any work may be done as per one’s will –
Section 518(2)(b), explanation(2)
 a person under one’s guardianship or custody or
responsibility;
 a person who cannot think about his own well-being for a
short time or forever due to old age or illness or mental or
physical weakness; and
 a person on whom one can impose financial pressure or
pressure because of the authority of the position.
UNDUE INFLUENCE
For examples
 employer – employee, police – accused, income tax
officer – assessee
 solicitor-client, trustee-beneficiary, spiritual advisor-
devotee, medical attendant – patient, creditor-debtor,
landlord-tenant, principal – agent
 Mental disability
FRAUD
 Section 518(2) (c) defines a contract in which fraud is
present.
 It defines ‘fraud’ as a situation in which any contracting
party or his/her agent with an intent to deceive another
contracting party or his/her agent commits any of the
following acts:
 causing or performing an act that causes to believe a
fact as true knowing that which in reality is not true;
 deliberate concealment of a fact by one having
knowledge of the fact
 performing any act declared to be fraudulent by the
law
Representation….statement of
facts
MISREPRESENTATION
 Section 518(2) (d) defines a contract in which
misrepresentation is present.
 The following acts are defined as misrepresentation:

 providing any false statement or facts relating to any

matter without any reasonable ground;
 persuade any other party affecting his/her interest
adversely;
 make mistake in matters relating to the contract;
 executing a contract on a different subject other than
the subject in which it is agreed.
VOIDABLE CONTRACTS
 Instead of making the contract void, the affected party
may demand that he/she be put in the same position in
which he/she was before the execution of the contract.
 In case of a contract in which undue influence is present,
the burden of proof to disprove it shall lie with the party
who has entered into a contract with a person on whom
one has influence or through whom any work may be
done as per one’s will.
 Any voidable contract before it is declared void shall
continue to be enforced as a valid contract as per the law.