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Unit 1: Laws of Contract

1.4 Consent Notes

We have seen earlier that an offer by one party is accepted by the other party. The consent of the
offeree to the offer by the offeror is necessary. It is essential to the creation of a contract that both
parties agree to the same thing in the same sense. When two or more persons agree upon the
same thing in the same sense they are said to consent.

Example: A agrees to sell his Maruti car Delux model for ` 1.20 lakhs. B agrees to buy the
same. There is a valid contract since A and B has consented to contract on the same subject matter.
Free consent is one of the essentials of a valid contract. Consent is said to be free when it is not
caused by:

1. Coercion,
2. Undue infl uence,
3. Fraud,
4. Misrepresentation or

5. Mistake.
1.4.1 Meaning of Coercion

Coercion is (i) the committing or threatening to commit any act forbidden by the Indian Penal
Code or (ii) the unlawful detaining or threatening to detain any property to the prejudice of any
person whatever with the intention of causing any person to enter into an agreement.

Example: A threatens to kill B if he doesn’t transfer his house in A’s favour for a very low
price. The agreement is voidable for being the result of coercion. However, it is not necessary that
coercion must have been exercised against the promisor only, it may be directed at any person.
(Chikkan Amiraju v/s Alwar Setti)

Effect of Coercion on the Validity of Contract

When consent to an agreement is caused by coercion the agreement is voidable at the option of
the party whose consent was so obtained. Thus, the aggrieved party can have the contract set
aside if he so desires otherwise the contract is a valid one. However, a person, to whom money
has been paid or anything delivered under coercion, must repay or return it to the other party.

Example: A railway company refused to deliver certain goods to the consignee except
upon the payment of an illegal charge for carriage, and he paid the sum charged in order to
obtain the goods. He is entitled to recover so much of the charge as was illegally excessive.

1.4.2 Meaning of Undue Influence (S. 16)
Undue influence consists in the improper exercise of power over the mind of one of the contracting

parties by the other. A contract is said to be induced by undue influence where the relations

subsisting between the parties are such that one of the parties is in a position to dominate the will
of the other and uses that position to obtain an unfair advantage over the other.

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