Free Consents And Void Agreements Flashcards
What is difference between Consent and Free Consent?
CONSENT:
Two Persons are said to consent when they agree upon something in the same sense. This is called “consensus-ad-idem”.
If there is no consent agreement is void.
Free Consent:
Consent is said to be free when it is not caused by;
° Coercion, or
° Undue influence, or
° Fraud, or
° Misrepresentation, or
° Mistake.
Define Coercion?
“Coercion” is the committing (or threatening to commit) any act forbidden by Pakistan Penal Code or unlawful detaining (or threatening to detain) any property, with the intention of causing any person to enter into an agreement.
• party exercising coercion may be either stranger or a relative. • It does not matter if Pakistan Penal Code is not enforceable at place where coercion is applied.
Which party will have to prove that there was Coercion at the time of contract?
The party rescinding the contract will have to prove that there was Coercion at time of contract.
What is the effect of coercion on contract?
The contract is voidable at the option of aggrieved party. If contract is rescinded, parties will restitute (i.e restore) benefits received, if any.
Define Undue Influence?
A contract is caused by undue influence if:
• One party is in a position to dominate the will of other because of close relation between them, and
• Dominant party uses that position to obtain an unfair advantage.
Party exercising undue influence is usually a relative ( but not always)
What are the examples of relations in which undue influence is not assumed?
Undue influence is not assumed in following cases:
• Husband and Wife
• Creditor and Debtor
• Landlord and Tenant
• Principal and Agent.
What is the effect of undue influence on contract?
The contract is voidable at the option of aggrieved party.
However, Court has discretion to set aside such contract either:
• absolutely or
• on such terms and conditions as it thinks fit (if the weaker party has received any benefit under it).
In case where undue influence is not presumed, burden of proof is on which party?
Party rescinding the contract will have to prove that there was undue influence.
In case where undue influence is presumed, burden of proof is on whom?
Party in dominating position will have to prove that there was no undue influence.
Write the difference between Coercion and Undue Influence?
Relationship:
In coercion, parties to a contract may or may not be related to each other. While in undue influence, parties to a contract are related to each other under some sort of relationship.
Consent:
In coercion, consent is obtained by giving a threat of an offence or committing an offence. While in undue influence, consent is obtained by dominating the will.
Nature of pressure:
Coercion involves physical pressure while undue influence involves mental pressure.
By whom:
Coercion can be exercised even by a stranger to the contract, while undue influence can be exercised only by a party to the contract and not by a stranger.
On whom:
Coercion can be exercised even on a stranger to the contract, while undue influence can be exercised only on a party to the contract.
Burden of proof:
In coercion, burden of proof is on party rescinding the contract
while in undue influence, burden of proof may be assumed by the law in some cases.
Criminal liability:
In coercion, the party committing the crime may be punishable under penal code.
Undue Influence doesn’t involve any criminal liability.
Reason:
In coercion, objective is to compel a person to enter into a contract. In undue influence, objective is to obtain an unfair advantage.
Restoration of benefits:
In coercion, the aggrieved party has to restore the benefit received. In undue influence, the party avoiding the contract may or may not restore benefit.
Write definition of MISREPRESENTATION in the context of contract act 1872?
There is a misrepresentation in following cases;
1: A person believes and gives a statement to be true, but which is false.
2: A person obtains an advantage through breach of duty, without an intent to deceive.
3: A party innocently causes another party to make a mistake as to the nature or quality of subject of agreement.
What are the essentials of MISREPRESENTATION?
Following are the essentials of misrepresentation:
1: By party to a contract:
The representation must be made by a party to a contract or his agent. Representation by stranger doesn’t affect validity of contract.
2: False representation:
The representation/statement is false but party believes it to be true and gives without intention to deceive.
3: Representation as to fact:
Representation must be factual, not opinions or intentions.
4: Acted upon it:
Other party must have acted on the basis of representation.
What is the effect of misrepresentation on contract?
The contract becomes voidable at the option of aggrieved party.
What are the exceptions to misrepresentation (cases in which party can’t rescind the contract)?
1: If aggrieved party had the means of discovering the truth with ordinary diligence;
2: If aggrieved party didn’t act on the basis of misrepresentation;
3: If aggrieved party takes a benefit under the contract after becoming aware of misrepresentation;
4: Of an innocent third party acquires interest in the property in goof faith for consideration;
5: If the party can’t be restored to their original position.
Write the definition of Fraud in the context of contract act 1872?
“Fraud” includes acts done to make contract with other party by deceiving him. It includes following:
1:False representation: i.e. a person gives representation as true, which he knows to be false.
2:Active concealment: i.e. actively taking concepts to conceal defects so that a reasonable examination doesn’t find them.
3: Empty promise: i.e. promise without intention of performing it.
4: Fitted act: i.e. any act fitted to deceive.
5: Declared act: i.e. any other act which the law declares to eb fraudulent.
