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ESSENTIALS OF A VALID

CONTRACT
SECTION 10
 All agreements are contracts if they

are made
 with free consent

 of parties competent to contract

 for a lawful object and lawful

consideration; and
 are not expressly declared to be void
 PARTIES COMPETENT TO CONTRACT
 SECTION 11, 12
 Persons who are majors
 (persons who have completed 18 years of age), and
 Persons of sound mind
 A person is said to be of sound mind for the purpose of making a
contract, when he is capable of understanding it and forming a
rational judgement as to the effects of the contract upon him.

 EXPLANATION

1. A person usually of sound mind but occasionally of unsound


mind, cannot make a contract when he is of unsound mind.
2. A person usually of unsound mind but occasionally of sound
mind can make a contract when he is of sound mind.
CONSENT
 SECTION 13
 Two persons are said to consent each other when
they agree upon the same thing in the same
manner.

FREE CONSENT
 SECTION 14
 A consent is said to be free when it is not caused by -
1. Coercion
2. Undue influence
3. Fraud
4. Misrepresentation
5. Mistake
COERCION

 Committing or threatening to commit any act


forbidden by Indian Penal Code; or
 Unlawful detaining or threatening to detain the
property of any person
to the prejudice of any person with the intention
of causing any person to enter into a contract.

EFFECT

The contract is voidable at the option of the


person whose consent is so obtained
UNDUE INFLUENCE

1. One of the parties is in a position to dominate the will of


the other
2. The dominating party uses that position to obtain unfair
advantage over the other

Dominating Position
(a) Where he holds a real or apparent authority over the
other or
(b) Where he stands in a fiduciary relation to the other

(c) Where he makes a contract with a person whose


mental capacity is temporarily or permanently affected
by reason of age, illness or mental bodily distress
FRAUD
Essentials-
1. There must be an intention to deceive.
2. The act must be done by a party to a contract or with
his connivance or by his agent.
3. There must be a false representation of a fact, i.e.,
suggestio falsi.
4. There must be an active concealment of a fact of which
he has the knowledge and duty to disclose, i.e. ,
suppressio veri.
5. Here must be afalse promise, i.e. , a promise made
wothout any intention to perform it.
6. Any other act or omission which the law considers to
be fraudulent or fitted to deceive which is done with
the obvous intention to commit fraud.
7. The party so induced must have acted upon it and
suffered loss

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