In Section ten of the Indian Contract Act it’s mentioned that the consent of the parties stepping into the contract ought to be free.
According to Section fourteen of the Indian Contract Act “Consent is claimed to be free once it’s not caused by coercion, undue influence, fraud, untruth and mistake.”
According to Section fifteen of the Indian Contract Act “ Coercion is that the committing, or threatening to commit, any act proscribed by the Indian legal code, or the unlawful detaining, or threatening to detain , any property, to the unfairness of a person no matter, with the intention of inflicting a person to enter into associate degree agreement.”
According to Section sixteen of the Indian Contract Act “A contact is claimed to be evoked by undue influence wherever the relations subsisting between the parties area unit specified amongst one in every parties is in a position to dominate the need of the opposite, associate degreed uses that position to get an unfair advantage over the opposite.”
According to Section seventeen of the Indian Contract Act “ Fraud suggests that and includes any of the subsequent acts committed by a celebration to a contract, or together with his connivance, or by his agent, with intent to deceive another party to that or his agent, or to induce him, to enter into the contract.
According to Section eighteen of the Indian Contract Act “ untruth suggests that the positive assertion, during a manner not secured by the knowledge of the person creating it, of that that isn’t true, although he believes it to be true; any breach of duty that, while not associate degree intent to deceive, gains a bonus to the person committing it, or anyone claiming below him, by dishonest another to his prejudice or to the unfairness of anyone claiming below him; inflicting, but innocently, a celebration to associate degree agreement, to create miscalculation on the substance of the issue that is that the subject of the agreement.”
Mistake subject to the provisions of Sections twenty, twenty one and twenty two of the Indian Contract Act. Once the consent of the parties to the contract is caused by mistake, it’s not free consent that is required for the validity of a contract.
Brief Study :
First of all allow us to fathom Agreement and Contract that area unit outlined within the Indian Contract Act 1872 and area unit the roots of our legal philosophy.
According to Section 2 (e) of the Indian Contract Act, 1872, “ each promise and each set of guarantees forming the thought for every different is associate degree agreement.” Solely those agreements that satisfy the necessities mentioned in Section ten of Indian Contract Act 1872, becomes contracts.
According to Section two (h) of the Indian Contract Act, 1872, “An agreement enforceable by law could be a contract.” And every one contracts area unit agreements.
Free Consent is one in every of the essential parts so as to be a legitimate contract. Consent is claimed to be free once the parties stepping into the contract area unit free from coercion, undue influence, fraud, untruth or mistake. Contract become revocable at the choice of the party whose consent was caused by coercion, undue influence, fraud or untruth. However, if the consent is caused by mistake, the agreement is void.
Coercion is claimed to be there wherever the consent of someone has been caused by Act proscribed by the Indian legal code or by Unlawful detaining of property.
Act proscribed by the Indian legal code- If someone commits or threatens to commit associate degree act proscribed by the Indian Penal Code with a read to getting the consent of the opposite person to associate degree agreement, the consent in such a case is claimed to own been obtained by coercion. For, coercion it’s not necessary that the Indian legal code ought to be applicable at the place wherever the consent has been thus caused. To represent coercion, it’s immaterial whether or not the Indian legal code is or isn’t operative within the place wherever the coercion is used.
Unlawful detaining of property-
- consistent with Section fifteen , coercion might even be caused by the unlawful detaining or threatening to detain, any property, to the unfairness of a person no matter, with the intention of inflicting a person to enter into a contract.
- To the unfairness of a person- Section fifteen needs that there ought to be committing or threatening to commit, any act proscribed by the Indian legal code, or unlawful detaining, or threatening to detain, any property, to the unfairness of a person, with the intention of inflicting a person to enter into associate degree agreement. It implies that the act inflicting coercion mustn’t essentially be directed against the catching party, it’s enough that the act is to the unfairness of a person no matter, associate degreed with the intention of inflicting a person to enter into an agreement.
Case Law – Ranganayakamma V. Alwar Setti
In Ranganayakamma v. Alwar Setti, the question before the Madras court was relating to the validity of the adoption of a boy by a widow, aged 13years. On the death of her husband, the husband’s body wasn’t allowed to be off from her house for incineration, by the relatives of the adopted boy till she adopted the boy. It had been command that the adoption wasn’t binding on the widow as her consent had been obtained by coercion.
Section sixteen of the Indian Contract Act, 1872 defines Undue Influence. If the consent of a celebration of the contract has been obtained by undue influence, it’s not the free consent, that is required for a sound contract. If the consent has been caused by undue influence, the contract is revocable at the choice of the party whose consent has been therefore obtained.
To represent undue influence, it’s necessary to prove that:
The relations subsisting between the parties are such one among the other in every parties is in a position to dominate the desire of the opposite.
•Such an individual uses his dominant position to get Associate in Nursing unfair advantage over the opposite. Such as-
1.wherever he holds a true or apparent authority over the opposite,
2.wherever he stands in an exceedingly legal relation to the opposite, or
3.wherever he makes a contract with an individual whose wit is briefly or for good affected owing to age, illness, or mental or bodily distress.
Case Law – Rukmini V. C. V. Krishnan NairIn
Rukmini v. C. V. Krishnan Nair, Associate in Nursing wife of seventy, United Nations agency had a paralytic stroke was created to execute a present deed while not the contents of the deed being created notable to her. It had been control that the burden of proof was on the receiver to indicate that there was no undue influence.
Section seventeen of the Indian Contract Act, 1872 defines Fraud. Once the consent of a celebration to the contract has been obtained by fraud, the consent isn’t free consent that is critical for the formation of a sound contract. In such a case the contract is revocable at the choice of the party whose consent has been therefore obtained. Fraud or deceit is additionally a misconduct, that Associate in Nursing action for damages can even lie. Fraud embrace any of the subsequent acts committed by a celebration to a contract, or his connivance:
- The suggestion, on a truth, of that that isn’t true by one United Nations agency doesn’t believe it to be true,
- The active concealment of a truth by one having data or belief of the very fact,
- A promise created with any intention of playacting it,
- Any alternative act fitted to deceive,
- Any such act or omission because the law specially declares to be dishonest .
Case Law- Keates V. Lord Cadogan
In Keates v. Lord Cadogan, A let his house to B that he knew was in an exceedingly ruinous condition. He additionally knew that the home is attending to be occupied by N forthwith. A didn’t disclose the condition of the house to B. it had been control that he had committed no fraud.
An innocent statement or statement is thought as untruth. Section eighteen of the Indian Contract Act, 1872, defines untruth. Positive assertion, i.e., a definite statement of truth by an individual of that that isn’t true, through he believes it to be true amounts to untruth. There ought to be a statement created innocently, i.e., with none intention to deceive.
When there’s a breach of duty whereby the person creating a statement gains some advantage at the price of the opposite party, and also the statement tho’ false is created while not Associate in Nursing intention to deceive, it additionally amounts to untruth.
For example- Section fifty seven, of the Indian Easements Act, 1882 lays down that the granter of a license is absolute to speak in confidence to the retailer any defect, that is probably going to be dangerous to the person or property of the retailer, of that the granter is aware however the retailer isn’t. Omission to form such a revelation, if it’s with none intention to deceive, would quantity to untruth.
Case Law-Derry V. Peek
In Derry v. Peek the administrators of a corporation declared within the prospectus of the corporate that that they had been approved to run tramways with steam power. Sanction from the Board of Trade had nevertheless to be obtained however the administrators honestly believed that a similar would be obtained as a matter after all. The Board of Trade refused to grant the permission for the employment of steam power. In Associate in Nursing action by a investor against the administrators for fraud, it had been control that there was a mere untruth however no fraud because the statement had been created with none intention to deceive.
When the consent of the parties to the contract is caused by mistake, it’s not free consent that is required for the validity of a contract. One or each of the parties could also be operating underneath some misunderstanding or misunderstanding of some truth with reference to the agreement. If such a misunderstanding or misunderstanding had not been there, in all probability they might not have united. Such contracts ar same to possess been caused by mistake.
A mistake may go in 2 ways:
- Mistake, once there’s no accord ad idem or consent, is absent- For a sound contract each the parties ought to have given their consent and also the consent ought to be free. In step with Section thirteen of the Indian Contract Act, 1872:
“Two or additional persons don’t comply with a similar issue within the same sense, there’s deemed to be no consent on their half. In alternative words, there could also be Associate in Nursing absence of a gathering of the minds of the parties, or there could also be no accord ad idem. In such cases, there arises no contract which may be enforced .”
- Mistake on the existence of the topic-matter- If each the parties to a contract believe the existence of the subject matter, that in truth doesn’t exist, the agreement would be void. The explanation is that if the subject-matter of the contract has already perished, there’s nothing concerning that the contract is being created. For example- during a contract for the sale of specific shipment, if the ship carrying identical has been put away and also the merchandise lost, or the sale is of a selected horse, that has already died the agreement is void if neither of the parties was awake to the facts.
Section seven of the Indian Sales of products Act, 1930 conjointly declares that if there’s a contract for the sale of specific merchandise however they’re non-existent at the time of the contract, the contract is void.
Case Law-Galloway v. Galloway
In Galloway v. Galloway, a person and a lady dead a separation deed, each of them operating underneath a ordinarily mistaken impression that they were married to every different. Since the very fact of wedding was non-existent, the deed was control void.
The Law Commission of Bharat in its Report on the Indian Contract Act has counseled change of Section fifteen and inclusion within the definition of different penal laws conjointly. The advice is as under:-
“ the right perform of the Indian legal code is to make offenses and not just to forbid. A legal code forbids solely what it declares punishable. There ar laws apart from the Indian legal code activity identical perform. We propose that the words “ Any act impermissible by the Indian legal code” ought to be deleted and a wider expression is substituted therefor in order that penal laws apart from the Indian Penal Code can also be enclosed. The reason ought to even be amended to identical result.”
The philosophy of undue influence was evolved by the Court of Equity in European country, and also the same has been explained by Ashburner as under:
“In a court of equity if A obtains edges from B, whether or not underneath a contract or as a present exerting influence over B that, within the opinion of the court, prevents B from sweat freelance judgment within the matter in question, B will put aside the contract or recover the gift. Moreover, in sure cases, the relation between A and B is also specified A has peculiar opportunities of sweat influence over B. If underneath such circumstances A enters into a contract over B or receives a present from B, a court of equity imposes upon A the burden, if he needs to take care of the contract or gift, of proving that in truth, he exerted no influence to get it.”
Mere silence on have an effect on the temperament of an individual to enter into a contract isn’t fraud unless the circumstances of the case ar specified, regard being had to them, it’s the duty of the person keeping silence to talk, or unless his silence is, in itself, corresponding to speech.
In case of untruth, the person creating the statement is innocent, and he makes the statement with none intention to deceive the opposite party. His statement is fake though he himself believes that identical is true. It’s referred to as innocent untruth as against fraud, wherever the person creating a falsity is aware of that identical is fake however builds identical on purpose to deceive the opposite party Associate in forcefully make him enter into an agreement that he wouldn’t have done otherwise.
Section twenty of the Indian Contract Act,1872, makes the agreement void if there’s a slip on the a part of each parties. Section twenty one of the Indian Contract Act,1872, deals with the result of mistake on the law, and Section twenty two of the Indian Contract Act,1872 deals with the contract caused by a slip of 1 party on the matter of reality.
(3rd semester, LLB course
NEF Law College, Guwahati, Assam.)