FREE CONSENT

1. Introduction

Dear students, welcome to the lecture series on Business Regulatory Frame Work. As you know
we are discussing the Indian Contract Act 1872. I have made it clear in my previous lectures that
an agreement is to be converted into the contract. If we wish that agreement should be
enforceable in the eye of law but an agreement has certain essential element and they should be
fulfilled to convert it into the contract. Today we will discuss one of the essential element that is
free consent.
2. Free Consent : An Introduction

Now if we look at the word free consent, it is made up of two things first is free and then
consent. First of all, I will take up the word consent for the discussion. The meaning of the
consent is that when parties enter into the contract they should have the consent about the subject
matter. In other words, we can say when both the parties are entering into the contract, they
should think about the subject matter in a same sense.
Suppose, for example A has got two scooters, one is of white colour, another is of green colour
and A makes an offer to the B that he would like to sell a scooter to the B in ten thousand
rupees. When A is making an offer to the B, he is having in his mind that he will be selling
the white scooter. Whereas when B gave the consent to the A to buy the scooter, he thought
he will be buying the scooter of the colour green. Now there is no consent in the mind of both the
parties because both the parties are thinking about the subject matter in a different sense, whereas
the meaning of the consent says both the parties should agree upon the same thing, in a same
sense. In Indian Contract Act Section-13 the definition of the consent is and I quote Two or
more persons are set to consent when they agree upon the same thing in the same sense.
Meaning thereby, the party should agree upon the same thing in a same sense and if consent is
lacking then contract will be void. It will not be enforceable in the eyes Page of
of law. It has no validity so when two parties enter into the contract they must have the consent.
3. Concept of Free Consent

After discussing the concept of consent, now we move on to discuss the concept of free
consent. Free consent; meaning thereby, both the parties should give the consent by the free
will. No party should give the consent under the compulsion. Section-14 of the Indian Contract

Act, deals with the concept of free consent. Free consent is caused to be in the contract if it is not
obtained by the following ways:
The first and the foremost way is the coercion. If there is coercion in consent then it is not a free
will of the parties. The rules regarding coercion are explained in the Section-15 of the Indian
Contract Act.
Second point of which is leading to the free consent is that if the consent is not caused by the
undue influence and related to this Section-16 applies. If the consent is not caused by the
fraud and the provision regarding the fraud are discussed in the Section-17. The consent will
be free if it is not taken by the misrepresentation. We will deal with all these provisions later on
one by one, and as far as the misrepresentation is concerned, Section-18 applies.
Consent will be free if it is not obtained by mistake and related to the mistakes the Sections are
20, 21 and 22. In the nutshell, it can be mentioned that the consent is free, if it is not caused by
these five methods and if any element is present or by any way we are getting the consent either
by coercion or by undue influence or by fraud or by misrepresentation the consent will not be
free.
When in a contract consent is not free the contract is voidable. When consent is not there the
contract is void. When consent is not free the contract is voidable. The contract is voidable at the
option of the aggrieved party. Now meaning of the aggrieved party is the party whose will was
not free, party which has given the Page of
consent under any these four ways; either by coercion or by undue influence or by fraud or by
misrepresentation. If the consent is obtained by these four methods then the consent is not free
and that party will be known as the aggrieved party and that aggrieved party has got a right to go
in the court of law and can declare the contract voidable. Now in the earlier discussion I made it
clear the meaning of the voidable. The voidable meaning thereby the aggrieved party has got the
option. Whenever there is an option in a contract to declare it void or valid that contract is
voidable. So the aggrieved party can go in the court of law and can exercise the option available
to the party to declare the contract void. But if the party desires, the party wants the contract
should be applicable then it will be applicable but the option is available with the aggrieved party
whose will is not free.
4. Coercion

Now we will discuss coercion in detail. Coercion means forcibly compelling somebody to enter
into the contract. If a party forcibly compelling somebody to enter into the contract, law says the
coercion has been exercised. Section-15 of the Indian Contract Act defines the coercion and
I quote Coercion is the 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
prejudice of any person whatever with the intention of causing any person to enter into
agreement. If we analyze the definition we get three or four very prominent points in it.
Coercion means threatening somebody or compelling somebody to enter into the contract. If we
threaten somebody to damage the property or if we threaten somebody forcibly or by threatening

or we commit or we damage the property of somebody by that method, if we compel a person to

enter into the contract that is known as coercion. So coercion say that we are threatening to
damage the property of somebody or we damage the property of somebody or we are threatening
the person physically then we say coercion has been exercised but now we will talk about the
elements of the coercion one by one. Page of
The first and the foremost element is the coercion must be committing any act forbidden by
Indian Penal Code. Any act which is prohibited by Indian Penal Code, if we take help of that act
and compel a person, or threaten a person by that act and he or she enters into the contract that is
known as contract has been entered into by the coercion. A person must be threatening to
commit any act, forbidden by Indian Penal Code. Now there are two things either we are
committing an act which is forbidden by Indian Penal Code or we are threatening to commit any
act forbidden by Indian Penal Code. There are two things we are committing an act or we are
threatening to commit an act forbidden by Indian Penal Code. Then we say the coercion has been
exercised. The third element in it is coercion must be unlawful detaining or threatening to detain
any property of other party then coercion is set to be exercised. When one party is unlawful
detaining the property or threatening to detain the property coercion is exercised.
For example A forcibly kidnaps the son of the B and asks the B that he will kill the son of
the B if B will not execute a promissory note of rupees one lakh in his favour. Now under this
threatening B execute a promissory note of rupees one lakh in favour of the A. Then we can
say now B has given this promissory note under coercion because A has threatened to B that
he will damage or he will kill the son of the B if he will not give a promissory note of one lakh
rupees.
Next point is coercion must be done with the intention of causing the other party to enter into the
contract. This point itself explain that one party when it is exercising the coercion on the other
party the intention is to enter into the contract, but we can analyze on this point that coercion has
been exercised. We are threatening another party or we are committing an act but there is no
intention that contract should be formulated out of it. Then it will be called that coercion was not
exercised because after exercising the coercion a contract should emerge out of it. If contract is
not emerging out of it by exercising the coercion then the aggrieved party will not have any
sufficient ground to go in the court of law and to say that they enter into the contract on behalf of
the coercion, because of the coercion because they dont have any proof to go into the court of
law, therefore if one party is exercising the coercion that should lead to the emergence Page of
of the contract. The coercion may be initiated by any person. It is not necessary that offeror, if he
gives an offer to the offeree, the coercion should be exercised by the offeror himself. Even
coercion can be exercised by a stranger. If offeror appoint somebody on his behalf to exercise the
coercion and compel the other party to enter into the contract that will be a valid ground for the
aggrieved party to go in the court of law and to declare the contract either void or voidable.
Meaning thereby, even a stranger can be involved, it is not necessary that party himself should be
directly involved while exercising the coercion.
Now next point related to the coercion is the IPC Indian Penal Code may or may not be enforce
where the coercion is exercised and the next important relevant rule is that in coercion, if we are
giving a threatening to file a suit against the other party then it will not be called as coercion.

For example A has given a loan to the B and B promised to the A that he will return the
loan within the three months. Now after the expiry of the three months B fails to return the loan
and after repetitive requests B is not returning the loan of the A and A threatens to the B
that he will go in the court of law to recover the loan. Now A in this case is threatening to the
B to go in the court of law. This threatening will not be included in the coercion because it is a
valid argument, it is a valid case and A is free to go in the court of law.
5. Undue Influence

Now I will take-up another element which is not leading to the free consent and that is undue
influence. Undue influence has been defined in the Section-16 of the Indian Contract Act. A
contract is set to be induced by undue influence where the relation 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 and unfair advantage over the other. Now, undue influence definition has got
three very points in it. Page of
First is that one party should be in a position to dominate the will of another party and after the
position, the position should be used by the party and after using the position the party should
have taken the undue advantage. So there are three things. You must have a dominating position
to prove that undue influence was exercised on you. You must have used your dominating
position to prove that undue influence was exercised and then you must have taken undue
advantage out of it. In an undue influence one party by its superior position trying to dominate
the will of another party. It is some time called as a mental coercion. In coercion, we have
studied that one party forcibly compelling the other party to enter into the contract. There the
pressure is of physical nature but in undue influence the relation between the parties are so that
one party is in a superior position and other party is in a weaker position. So the superior party
exercises, its superior and dominating position over the weaker party and weaker party changes
its will against its desire and enters into the contract that is known as the undue influence has
been exercised. Now, this generally happens you must have seen in day to day life that if we take
the example of doctor and patient relationship. Doctor is in a superior position. When a patient
visits to the doctor he completely feels helpless or he is in a weaker position according to undue
influence and whatever doctor says a patient has to obey the instructions. In spite that he is
unwilling to follow or he is not willing to do what the doctor is saying but doctor is in a superior
position, he is in a dominating position and if he uses that position and take some advantages out
of it the important thing is he has taken the advantages out of it that is known as the doctor has
exercised the undue influence over the patient. Now this is relationship sometime is known as the
fiduciary relationship. There are certain relationships, which have been explained in the law
where there are fiduciary relationships between the two parties. Fiduciary relationship means the
relationship which is based on trust. Now doctor and patient relationship is a fiduciary
relationship, lawyer and the client relationship is a fiduciary relationship. Whatever a lawyer
says to the client, a client has to follow it and we know it a lawyer is in a superior position, a
client is at a weaker position. Similarly the preacher and the follower, the relationship between
preacher and follower is based on trust and there is a fiduciary relationship and we know
whatever a preacher preaches the follower sometime unwillingly follow it. Page of

Similarly the parents and the child, the relationship between parents and the child is a fiduciary
relationship which is based on trust. So these are the examples, these are the cases, where the
undue influence can be exercised. So in undue influence very prominent thing is the weaker
partys mind is deviated that is why we call it mental coercion. Weaker partys mind is deviated
by the dominating party and weaker party enters into the contract because an undue influence has
been exercised by the stronger party.
6. Essentials of Undue Influence

Now we will talk about somehow the essentials and legal rules for valid undue influence, when
we can say that undue influence was exercised? The first and the foremost point is that one party
must be in a position to dominate the will of the other party and that I have explained the party
should be in a dominating position to impose its condition. Take the example of a doctor, take
the example of a lawyer, and take the example of a preacher. So they are in a dominating
position by using the dominating position you have taken the advantages out of it. Now when we
talk about the dominating position it means that dominating position sometime comes to you
because of the authority you have got. It can be called as an apparent authority. The authority
which is available and we are exercising the authority over the weaker party. Had undue
influence be not exercised? The weaker party would not have entered into the contract. So we
have got the apparent authority and by exercising that apparent authority that is giving us a
dominating position. Another important point is that the dominating party uses its superior
position to obtain the undue advantage. Suppose I am a stronger party but I am not using my
position. Then it will be called that I am not exercising the undue influence. All the three
conditions of the undue influence should be fulfilled simultaneously. The dominating position
should be hold by the party. He should exercise that dominating position and should have taken
the advantage. I am in a dominating position, as a University teacher I am in a dominating
position before the students. Students has to obey whatever I say but suppose I am not using my
dominating position then it will not be called that undue influence was exercised. So dominating
position should be used in spite of being having a Page of
dominating position it should be used and it should be used to take the undue advantage out of it.
The weaker party is come to the pressure on unwillingly following the stronger partys
instruction. Now these are the three very important elements in an undue influence.
7. Effects of Undue Influence

Now we come to the effect of the undue influence. The effect is also the same. The weaker party
can go in the court of law and can declare the contract voidable. Then when we say voidable
meaning thereby the same logic will be applicable here also, when weaker party exercises this
option which was available in the coercion. The same rule is applicable here. The weaker party
has to go in the court of law and has to prove here the burden of proof is on weaker party.
Weaker party will say that if the undue influence would not have been exercised on him the party
would not have entered into the contract. The contract emerged; contract kept up, contract got

framed, contract was enacted, contract was coined, contract was enter into by the weaker party
because stronger party dominated the will of the weaker party and burden of proof lies on the
weaker party.
8. Difference : Coercion and Undue Influence

Now I will explain you the difference between coercion and undue influence. In both the cases
consent is not free this is the similarity between the two and in both the cases the contract is
voidable but the difference is coercion is exercised sometime by the stranger but undue influence
cannot be exercised by the stranger. The party concern party for example stronger party has to be
party which is exercising the undue influence. Coercion is of physical nature, undue influence is
of moral nature. The relation between the two parties in coercion is immaterial but in undue
influence the relation between the two parties is material and the relation is known as the
fiduciary relationship exists between the two parties.