Business law is a crucial component of law in general since, without it, the corporate, manufacturing, and retail sectors would all be under a dictator’s rule. Combining business and law seeks to create secure and efficient working environments for everyone associated with the business.
You m...
CHAPTER III
FREE CONSENT, LAWFUL OBJECTS AND CONTINGENT CONTRACT CONSENT
AND FREE CONSENT
Meaning and definition
Section 13 of Indian Contract Act defines content as "two or more persons are said to consent
when they agree upon the same thing in the same sense" According to the. definition, consent
involves Consensus ad idem i.e, identity of minds between the contracting parties regarding
the subject matter of the agreement In other words contracting parties must agree upon the
same thing in the same sente at the same time If there is no real consent there cannot be real
contract. When the parties enter into an agreement concerning a particular person or a thing,
but each has a different person or a thing in the mind, then there is no consent of the parties
and no contract comes into existence between them.
Eg. A had two scooters, one was green colour and the other was white A offered to sell his
green scooter to B for Rs 40,000 B accepted the offer believing it to be white scooter In this
case no contract arises between A and B as there is no consent of the parties.
Free consent:
Meaning and definition:
The consent of both the parties entering into contract must also be free. It is the essential
requirement of a valid contract A contract which is valid in all other respects, may still fail
because of the fact that there was no real consent to it by one or both of the parties. Section
10 of the Indian Contract Act specifically states that a contract is valid and enforceable if it is
made with the free consent of the parties.
The term free consent may be defined as the consent which is obtained by the free will of the
parties and neither party was forced or induced to give his consent. If the consent is there but
it is not free or real, then the contract will be voidable at the option of the party whose
consent is not free.
The term free consent is defined in Section 14 of Indian Contract Act which reads as
under:
"Consent is said to free when it is not caused by
i. Coercion (Section 15)
ii Undue influence (Section 16)
iii. Fraud (Section 17)
iv. Misrepresentation (Section 18)
BUSINESS LAW CHAPTER III ,
ANJALI VIJAY
, P a g e |2
v. Mistake (Section 20, 21.22)".
The analysis of this section shows that when the consent of either party is obtained by one of
the above mentioned elements, it will not be free.
Coercion:The term 'coercion means forcibly compelling a person to enter into a contract. In
such cases, the consent of the party is obtained by use of force or under a threat An
agreement, in which consent is caused by coercion, is voidable at the option of the party
whose consent was so obtained.
Definition: Section 15 of Indian Contract Act defines coercion as "the act of committing or
threatening to commit any act forbidden by IPC or the unlawful detaining or threatening to
detain any property to the prejudice of any person whatever, with the intention of causing
the other party enter into an agreement"
The analysis of this section shows that, the coercion implies a committing or threatening to
commit some act which is contrary to law. The consent is said to be caused by coercion when
it is obtained by either of the following techniques:
a. Committing or threatening to commit any act forbidden by Indian Penal Code.
b. Unlawful detaining or threatening to detain any property
Eg: A threatens to kill B if he does not agree to sell his car to A for 10000. Fearing death B
enters into an agreement with A for the sale of his car for 10000 only. The agreement is
voidable at the option of B as the consent of it is obtained by threatening to kill a person
which is forbidden by IPC.
Case law: Ranganayakamma VS Alwar setti
A gentleman died, leaving a young widow of 13 years. The young widow was made to agree
to adopt a boy of her husband's relative who threatened her that they would not allow the
dead body of her husband to be removed for cremation until she consented to the adoption
of the boy. The young widow adopted the boy. Subsequently, she applied to the court for the
cancellation of the adoption taking the defense that her consent for the adoption of the boy
was given under coercion. It was held by the court that her consent for the adoption was
obtained by coercion and option. 30 the contract was voidable under her option.
Essentials or legal rules of a valid coercion:
1. Coercion must be committing of any act forbidden by IPC: When the consent of a
person is obtained by any act which is punishable by IPC, the consent is said to be
obtained by coercion.
BUSINESS LAW CHAPTER III ,
ANJALI VIJAY
, P a g e |3
Eg.. A gave severe beatings to It and caused him grievous hart by dislocating his teeth
After this A made B to agree to sign promissory note for Rs 3000 in A's favour. This
promissory note will be voidable as the consent is obtained by causing grievous kurs
which is an offence under IPC
2. The coercion must be threatening to commit any act forbidden by IPC: When the
consent of a person is obtained by threat of committing any act which is forbidden by
the
Indian Penal Code, the consent is said to be obtained by coercion eg. consent obtained
at the pistol point or by threatening to cause death or by intimidation.
3. The coercion must be unlawful detaining or threatening to detain any property:
In case the consent is obtained by unlawful detaining or threatening to detain any
property, the consent is said to be obtained by coercion.
E.g. An agent refused to hand over the accounts book of the business, at the end of
his term, to the new agent unless the principal freed him from the liability in respect
of his agency. The principal executed a release deed under which the agent was freed
from the liability. It was held that the release deed was voidable at the option of the
principal as he-was made to execute the release deed under coercion. In this case
consent was obtained by unlawfully detaining the property (i.e, accounts book) of the
principal.
4. The acts of coercion must be done with the intention of causing the other party
to enter into the contract: It is also one of the essential elements of coercion. Threats,
which amount to coercion, must be done with the intention of causing the other party
enters into the contract. In other words the act amounting to coercion must be done
with the intention of obtaining the consent of the party and inducing him to enter into
a contract.
E.g. A gave a threat to B that he would take the possession of all the land belonging to
B and will not vacate it at any cost. Here A's Threat is not coercion as it is not done
with the intention of inducing B to enter into contract.
5. IPC may or may not be in force where the coercion is committed: According to this
legal rule, it is not necessary that the coercion must be committed in a place where
the Indian Penal Code is or is not in force in the place where the act amounting to
coercion is employed.
6. The acts of coercion may be initiated by any person: According to this rule the
threat amounting to coercion need not necessarily be initiated from a party to the
contract. It may be initiated by any person even by a stranger. Similarly, it may be
directed against any person including stranger.
BUSINESS LAW CHAPTER III ,
ANJALI VIJAY
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller adithacharya. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $40.49. You're not tied to anything after your purchase.
