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Introduction
Free consent of all the parties to a
contract is an essential of a valid
contract as per requirement of section
10.
When there is no consent at all, the
agreement is void ab-initio, i.e. it is not
enforceable at the option of either party.
Consent defined: two or more person are
said to consent when they agree upon
the same thing in same sense ( sec 13).
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COERCION
In simple words, coercion is threat or force
Essentials of Coercion
There must be clear threat.
The threat should be to commit an act
forbidden by law.
It must be uttered with the intention of
causing the other party to enter into an
agreement.
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Types of Coercion
Threat to file a suit-A threat to file a suit does not amount
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Undue Influence
Section 16(1) provides that a contract
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Coercion
Undue influence
Obtaining the
consent
By committing
or threatening
to commit an
offence
Physical
Not presumed
by court, party
have prove it.
By dominating
the other party
Type of force
Presumption
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Nature of
liability
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Mental or moral
It can be
presumed as
other party is in
dominating
position
Criminal liability Not criminal
liability
FRAUD
Section 17 of Indian Contract Act, 1872 defines Fraud'.
"Fraud" means and includes any of the following acts committed by a party to
a contract, or with his connivance, or by his agent, with intent to deceive
another party thereto of his agent, or to induce him to enter into the contract:(1) the suggestion, as a fact, of that which is not true, by one who does not
believe it to be true ;
(2) the active concealment of a fact by one having knowledge or belief of the
fact ;
(3) a promise made without any intention of performing it
(4) any other act fitted to deceive ;
(5) any such act or omission as the law specially declares to be fraudulent.
Mere silence as to facts likely to affect the willingness of a person to enter into
a contract is not fraud, unless the circumstances of the case are such that,
regard being had to them, it is the duty of the person keeping silence to speak,
or unless his silence is, in itself, equivalent to speech.
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E.g. A, horse dealer sold a mare to B.A knew that the mare
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Effect of fraud
When the consent to an agreement is
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Misrepresentation
The term Misrepresentation means a false representation
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Contd
2.Any breach of duty, which ,without an intention
to deceive gains an advantage to the person
committing it or anyone claiming under him, by
misleading another to his prejudice or to the
prejudice of anyone claiming under him. This is
known as Constructive fraud".
3.It also covers those cases where a statement
when made was true but subsequently before it
was acted upon, it became false to the
knowledge of the person making it .In such a
case , the person making the statement comes
under an obligation to inform the other party of
the true facts.
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Essentials Of Misrepresentation
There should be a representation or assertion.
Such representation must relate to a matter of fact
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MISTAKE
Mistake may be defined as an erroneous
belief concerning something. It means that
Mistake of Law
parties intending to do one thing have by
intentional error done something else.
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Mistake Law
Mistake of Indian Law: The contract is binding
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Bilateral Mistake
Mistake as to subject matter. It falls into six heads namely
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Unilateral Mistake
Section 22 provides that if one party
alone is under mistake of fact. Unilateral
mistakes do not affect the validity of
contract unless they concern some
fundamental fact and the other party is
aware of the mistake.
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