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WHAT IS FREE CONSENT?
Two or more person are said to consent when they
agree upon the same thing in the same sense.:-
section 13 of indian contract act.
Consent:-means that the parties should have
identity of mind.
Free consent: consent is said to be free when its
not caused by:
1. Coercion(as defined in section 15)
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CONT
2. Undue influence(as defined in section 16)
3. Fraud(as defined in section 17)4. Misrepresentation(as defined in section 18)
5. Mistake.(subject to provision of sections 20,21
&22)
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COERCION
Forcibly compelling a person to enter intocontract.
coercion if the committing or threating tocommit,any act forbidden by the indian penalcode,or the unlawful detaining,or threatening todetain,any property,to the prejudice of any personwhatever,with the intention of causing any personto enter into agreement.(sec 15 of in indiancontract act)
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UNDUE INFLUENCE
Means the unfair use of ones superior power inorder to obtain the consent of the person who is inthe weaker position.
A contract is said to be induced by undueinfulencewhere i)the relation subsisting betweenthe parties are such that one of the parties is in aposition to dominate the will of the other, andii)uses the position to obtain an unfair advantageover the other.(Sec 16(1) of Indian contract act.
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POINTS OF DIFFERENCE
COERCION UNDUE INFLUENCE
Definition Is an act based upon the use of
physical force,punishable under indian
penal code.(Sec 15)
Is a act based upon the use
of moral force,which is
not punishable.(Sec 16)
Parties Can be employed by any person evenby stranger to the contract Is employed be any of theparties to the contract
Relationship
of the parties
Parties need not have any relationship
in between themselves
Must have fuduciary
relationship
Dominance of
one party
None of parties have dominating
position to dominate the will of theother party
One of the parties has the
position to dominate thewill of the other.
Punishment Is an act punishable under indian
penal code
Not punishable under it.
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FRAUD
Intentional,deliberate or wilful misstatement of
facts.
Fraudmeans and inculdes any of the followingacts 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:
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ESSENTIALS OF FRAUD
Making a false suggestion as to a fact
Active concealment of a fact
A promise made without any intention ofperforming it
Any other act fitted to Deceive
Any such act or Omission as the law speciallyDeclared to be fraudulent
The party subjected to fraud must have suffered
some loss.
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MISREPRESENTATION
What is Representation?
Statement or assertion
Made by one party to the another Before or at the time of contract
Regarding some facts relating to it.
What is Misrepresentation? Representation which is false or misleading.
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ESSENTIALS OF
MISREPRESENTATION
It would be relevant if it satisfies the following
requirements:
It must be false, but the person who made ithonestly believes it to be true.
It must relate to the material facts of the
contracts.
it must be made before the conclusion of the
contract.
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DIFF.BETWEEN MISREPRESENTATION AND
FRAUD.
MISREPRESENTATION FRAUD
No intention to deceive the other party Intention to deceive
Not an act punishable by Indian penal
code. Hence it is not
an?
Can become a criminal act punishable
under Indian penal code.
Its is an innocent wrong. Its is intentional or wilful wrong.
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MISTAKE
An erroneous belief concerning something.
Or incorrect belief which leads one party to
misunderstand the other.Types of Mistakes:
1. Mistake of facts
2. Mistake of lawMistake of facts are again classified into two:
1. Bilateral Mistake
2. Unilateral mistake
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Mistake
Mistake of Fact
(Sec 20)
Mistake of Law
(Sec.21)
Bilateral Mistake Unilateral Mistake Law of the land Foreign Law
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CONT..
BILATERAL MISTAKE
A mistake in which both the parties to an
aggrement are confused about the facts which areessential to the aggrement.
UNILATERAL MISTAKE
A mistake in which only one of the parties to anaggrement is confused about the facts which are
essential to the aggrement.
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MISTAKE OF LAW
Mistake of law is of two types:
Mistake of law of the land Mistake of foreign law.
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