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Consent

The document discusses various concepts related to consent in contracts such as coercion, undue influence, fraud, and misrepresentation. It provides definitions and explanations of these concepts from relevant sections of Indian contract law. It also discusses the effect of vitiating factors like fraud and misrepresentation on the validity of agreements and consequences of rescinding voidable contracts. Key points include that consent caused by coercion, fraud or misrepresentation makes a contract voidable at the option of the affected party.

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Amruta Sharma
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45 views15 pages

Consent

The document discusses various concepts related to consent in contracts such as coercion, undue influence, fraud, and misrepresentation. It provides definitions and explanations of these concepts from relevant sections of Indian contract law. It also discusses the effect of vitiating factors like fraud and misrepresentation on the validity of agreements and consequences of rescinding voidable contracts. Key points include that consent caused by coercion, fraud or misrepresentation makes a contract voidable at the option of the affected party.

Uploaded by

Amruta Sharma
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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Consent

Sec 14: Free Consent


• Coercion – Sec 15
• Undue Influence –Sec 16
• Fraud –Sec 17
• Misrepresentation –Sec 18
• Mistake –Sec 20,21,22 r/w Sec 13
• Effect of vitiating factors –Sec 19 and 19 A
Coercion – Sec 15
• Committing or threatening to commit – any act forbidden by IPC, or
• Unlawful detaining or threatening to detain any property
By or To any other
person ..
Party???
• Ranganayakamma v Alwar Setti ILR (1889) 13 Mad 214
• Chikham Ammiraju v Chikham Seshamma ILR (1918) 41 Mad 33
• Astley v Reynolds (1731) 93 ER 939
• Workmen of Appin Tea Estate v Industrial Tribunal AIR 1966 Assam 115
• Askari Mirza v Jai Kishori (1921) 16 IC 344
• Andhra Sugars Ltd v State of Andhra Pradesh AIR 1968 SC 599
Undue Influence – Sec 16
• Position to dominate the will of the other party
• Using that position to obtain unfair advantage

• Position to dominate:
• Real or apparent authority
• Fiduciary relation
• Contract with a person with mental capacity affected by age, illness or bodily distress

• Onus: if contract unconscionable – burden on person in the dominant


position
Sec 111: Indian Evidence Act
• 111. Proof of good faith in transactions where one party is in relation of active
confidence.—Where there is a question as to the good faith of a transaction
between parties, one of whom stands to the other in a position of active
confidence, the burden of proving the good faith of the transaction is on the party
who is in a position of active confidence.
• Illustrations
• (a) The good faith of a sale by a client to an attorney is in question in a suit brought
by the client. The burden of proving the good faith of the transaction is on the
attorney.
• (b) The good faith of a sale by a son just come of age to a father is in question in a
suit brought by the son. The burden of proving the good faith of the transaction is
on the father.
Undue Influence – Sec 16
• Mannu Singh v Umadat Pande (1890) 12 All 523
• Phillip Lukka v Franciscan Association AIR 1987 Ker 204.
• Niko Devi v Kirpa AIR 1989 HP 51.
• Lakshmi Amma v Telengala Narayana Bhatta AIR 1970 SC 1367.
• Raghunath Prasad v Sarju Prasad AIR 1924 PC 60.
• Shrimati v Sudhakar R Bhatkar AIR 1988 Bom 122.
• Lloyds Bank v Bundy (1975) 1 QB 326.
• Wajid Khan v Raja Ewaj Ali Khan ILR (1891) 18 IA 144.
Section 19-A
Misrepresentation- Sec 18 Unwarranted
Statements

• “Misrepresentation” means and includes—


1. the positive assertion, in a manner not warranted by the information of
Constructive the person making it, of that which is not true, though he believes it to
Fraud
be true;
2. any breach of duty which, without an intent to deceive, gains an
advantage of the person committing it, or any one claiming under him,
by misleading another to his prejudice, or to the prejudice of any one
claiming under him;
3. causing, however innocently, a party to an agreement, to make a mistake
as to the substance of the thing which is the subject of the agreement.
Explanation to Inducing mistake about subject matter
section 19
Misrepresentation- Sec 18
• Oriental Bank Corporation v John Fleming (1879) 3 Bom 242.
• Bindu Sharma v Ram Prakash Sharma AIR 1997 All 429.
• Edgington v Fitzmaurice (1885) 29 Ch D 459.
• With v O’Flanagan (1936) 1 All ER 727.
• Attwood v Small (1838) 6 C&F 232.
• Peek v Gurney (1873) LR 6 HL 377.
• Shoshi Mohun Pal Chaudhary v Nobo Krishto Poddar (1874) 5 Cal 801.
Fraud- Sec 17
‘Fraud’ means and includes any of the following acts committed by a party to a contract, or with his
connivance, or by his agent, with intent to deceive another party thereto or his agent, or to induce him 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. the active concealment of a fact by one having knowledge or belief of the fact;
3. a promise made without any intention of performing it;
4. any other act fitted to deceive;
5. any such act or omission as the law specially declares to be fraudulent.

Explanation.—Mere silence as to facts likely to affect the willingness of a person to enter into a contract is
not fraud, unless the circumstances of the case are such that, regard being had to them, it is the duty of
the person keeping silence to speak, or unless his silence, is, in itself, equivalent to speech. 
Illustrations
a) A sells, by auction, to B, a horse which A knows to be unsound. A says
nothing to B about the horse’s unsoundness. This is not fraud in A.
b) B is A’s daughter and has just come of age. Here the relation between
the parties would make it A’s duty to tell B if the horse is unsound.
c) B says to A—‘‘If you do not deny it, I shall assume that the horse is
sound”. A says nothing. Here, A’s silence is equivalent to speech.
d) A and B, being traders, enter upon a contract. A has private information
of a change in prices which would affect B’s willingness to proceed with
the contract. A is not bound to inform B.
Fraud- Sec 17
• Derry v Peek (1889) 14 App Cas 337
• Shri Krishan v Kurukshetra University AIR 1976 SC 376.
• Delhi Development Authority v Skipper Construction Co (P) Ltd (2000)
10 SCC 130.
• V Srinivasa Pillai v LIC of India AIR 1977 SC 381.
• P Sarojam v LIC of India AIR 1986 Ker 201.
• Kiran Bala v Bhaire Prasad Srivastava AIR 1982 MP 242.
Fraud Misrepresentation

• Voidable • Voidable
• Intention • No intention
• False representation • False representation
• Defense- due diligence • Defense- Due diligence- means
• Burden of proof of discovering the truth
• Tort remedy • No tort – sec 75
• Silence fraud only when duty to • Silence can cause
speak or silence is deceptive misrepresentation when duty to
speak
19. Voidability of agreements without free
consent.
• When consent to an agreement is caused by coercion, fraud or misrepresentation, the
agreement is a contract voidable at the option of the party whose consent was so
caused. A party to contract, whose consent was caused by fraud or misrepresentation,
may, if he thinks fit, insist that the contract shall be performed, and that he shall be
put in the position in which he would have been if the representations made had been
true.
• (Exception) —If such consent was caused by misrepresentation or by silence,
fraudulent within the meaning of section 17, the contract, nevertheless, is not
voidable, if the party whose consent was so caused had the means of discovering the
truth with ordinary diligence.
• Explanation.—A fraud or misrepresentation which did not cause the consent to a
contract of the party on whom such fraud was practised, or to whom such
misrepresentation was made, does not render a contract voidable.
• 66. Mode of communicating or revoking rescission of voidable
contract.—The rescission of a voidable contract may be communicated
or revoked in the same manner, and subject to the same rules, as apply
to the communication or revocation of a proposal.

• 64. Consequences of rescission of voidable contract.—When a person


at whose option a contract is voidable rescinds it, the other party
thereto need not perform any promise therein contained in which he is
promisor. The party rescinding a voidable contract shall, if he have
received any benefit thereunder from another party to such contract,
restore such benefit, so far as may be, to the person from whom it was
received.
Effect of Fraud and Misrepresentation
When cannot be avoided:
Approves or takes benefit
Failure to restore
Lapse of time
Setting up of jus turtii
• Car and Universal Finance Co Ltd v Caldwell (1961) 1 QB 525.
• Long v Lloyd (1958) 1 WLR 753.
• Wallis v Pratt (1911) AC 394.
• Phillips v Brooks Ltd (1919) 2 KB 243.
• Leaf v International Galleries (1950) 2 KB 86.

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