Free Consent Business Law

8/13/2019 Free Consent Business Law

1/19

AMITY GLOBAL

BUSINESS SCHOOL Chandigarh

FREE CONSENT-(SECTION 13-21)

COERCION

UNDUE INFLUENCE VOIDABLE

FRAUD

MISREPRESENTATION MISTAKE VOID


2/19

AMITY GLOBAL


Coercion(sec 15)

Undueinfluence

misrepresentation

mistake

Fraudulent(sec17) Innocent (sec 18)

Mistake of law(sec21)

Mistake of fact(sec20)

Of the country Of theforeign Bilateral unilateral


3/19

AMITY GLOBAL


DEFINITIONS COERCION(SEC-15)

committing or threatening to commit any act

forbidden by IPC OR unlawfully detaining orthreatening to detain, any property to the prejudiceof any person with the intention of inducing anyperson to enter into an agreement.

UNDUE INFLUENCE(SEC-16)A contract is said to be induced by undue influencewhere the relations subsisting between the partiesare such that one of the parties is in the position todominate the will of the other and uses the position

to obtain an unfair advantage over the other


4/19

AMITY GLOBAL


COERCION(SEC-15) When the person is compelled to enter into a contract bythe use of force by the other party under a threatcoercion is said to be employed.

Eg. A threatens to shoot B if he does not release him

from Debt which A owes to B.B releases A under thethreat.

Other e.g. Ranganayakamma v Alwar Setty (girl wasforced to adopt a kid after her husbands death)

Effect-the contract is voidable at the option of party Threat to commit suicide also amount to coercion

Duress-near equivalent term of coercion ,is used inEnglish law


5/19

AMITY GLOBAL


UNDUE INFLUENCESection16(2) of IC Act

- person is deemed to be in a position to dominatethe will of another

A) where he holds a real or apparent authority overthe other e.g. master servant ,public officer&accused

b) Where he stands fiduciary relationship to theother e.g. father son ,guardian ward

c) Where he is mentally or physically ill eithertemporarily or permanently due to age, illness,mentally or bodily distress


6/19

AMITY GLOBAL


Coercion undue influence Obtaining theconsent-consentobtained bycommitting orthreatening to commitan offense

Physical force is used

May be even used bystranger to thecontract

Here, consent isobtained bydominating the will ofother person

Mental force is used

Can only be used byparty to contract


7/19

AMITY GLOBAL


FRAUD SECTION -17 MEANS AND INCLUDES ANY OF THE FOLLOWING

ACTS;

A false suggestion as to a fact known to be false or notbelieved to be true (e.g. a companys prospectus)

Active concealment of fact by one having knowledge orbelief of fact (A sold mare to B which had a defectedfoot, and the defect was filled up to defy detection ,B

discovered the defect and it was held that the agreementcould be avoided by B)

A promise made without any intention of performing it(eg .man marrying wife just as a fraud)


8/19

AMITY GLOBAL


Any other act fitted to deceive

Any such act or omission as lawspecifically declares to be fraudulent


9/19

AMITY GLOBAL


MISREPRESENTATION(SECTION-18) Means false representation made innocently with an

honest belief as to its truth by a party without any

intention to deceive

Thus false statement is made willfully or innocently

Fraudulent misrepresentation innocent misrepresentation


10/19

AMITY GLOBAL


Misrepresentation fraud It is innocent The suggestion is

believed to be true

The aggrieved party canrescind the contract orsue for restitution butcannot suit for damages

I truth is discovered thecontract will not beavoided

It is deliberate

Fraud is not believed tobe true

He can also claimdamages

If truth is discovered thecontract is voidable


11/19

AMITY GLOBAL


MISTAKE SECTION -20 MEANS erroneous belief concerning something.

it means that parties intending to do one thing

have by intentional error done something else

Mistake is of two kinds 1. Mistake of fact

2. Mistake of law

Mistake of law is of Indian law or foreign lawMistake may be unilateral or bilateral


12/19

AMITY GLOBAL


Mistake of fact-a man and a woman madea separation deed under which the managreed to pay a weekly allowance to the

woman under a mistaken assumption thatthey were lawfully married. it was held thatthe agreement was void as there was

common mistake on a point of fact whichwas material to the existence of theagreement( Galloway v. Galloway)


13/19

AMITY GLOBAL


BILATERAL MISTAKES Mistake as to subject matter i.e existence,

identity, price, quantity, title, price, quality

Mistake as to possibility of performance i.ephysical impossibility, legal impossibility

UNILATERAL MISTAKE

As to nature of contract As to identity of persons


14/19

AMITY GLOBAL


E.g. of bilateral mistakes Existence of Subject matter-there is anagreement between A and B for the purchase ofa certain horse, but the horse is dead at the time

of the contract. the agreement is void Mistake of identity of subject matter-eg. Of 2

cars maruti and santro

Price-a seller, within the knowledge of B ,thebuyer makes a mistake n writing a figure$1250,the agreement is void


15/19

AMITY GLOBAL


Unilateral mistakes Mistake as to nature of contract-e.g.. A blindman signing a document read over to himwrongly will not bind him. this is because of thefact that the mind of the signer does notaccompany the signature, but this rule will notapply to the person who can read.

(b) mistakes as to identity of persons-mistake asto the identity of a person may also avoid acontract, where A intends to contract only with B,but enters into a contract with C believing him tobe B, the contact is vitiated


16/19

AMITY GLOBAL


Doctrine of caveat emptor Under the doctrine of caveat emptor, the buyer could not

recover from the seller for defects on the property thatrendered the property unfit for ordinary purposes. The

only exception was if the seller actively concealed latentdefects

Caveat emptormeans let the buyer beware or that thebuyers should examine and check for themselves thingswhich they intend to purchase and that they cannot later

hold the vendor responsible for the broken condition ofthe thing bought.


17/19

AMITY GLOBAL


Exercise A agreed to sell B a specific cargo of corn perS.S.Malwa supposed to be on its way fromLondon to Mumbai. it turned out that before theday of the bargain the ship had been cast away,and the goods lost. Discuss the rights of A andB.

A contracts with B to buy a necklace ,believing itis made of pearls whereas it is in fact made upof imitation pearls of no value .B knows that A ismistaken and takes no steps to correct the error.is A bound by the contract?


18/19

AMITY GLOBAL


A an old man of feeble sight, signed a bill ofexchange thinking it was a guarantee there wasno negligence on the part of A .is A liable.

A purchased a typing machine on a dealersrepresentation that it was a new model .afterpaying the purchase price ,he discovered that,although the machines looked new ,it was

actually a re-built model. what are As legalrights?


19/19

AMITY GLOBAL

BUSINESS SCHOOL Chandigarhanswers

1.agreement is void

2yes,the doctrine of caveat emptor willapply

3.no

4.a may void the contract on account of

fraud and claim damages

Date post:	04-Jun-2018
Category:	Documents
Upload:	rohanjangid8
View:	227 times
Download:	0 times

Free Consent Business Law

Documents