Page 53 - DMGT102_MERCANTILE_LAWS_I

Unit 4: Free Consent

Notes
Example:
(i) 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 have consented to contract on the same subject matter.
(ii) A who owns two Maruti cars, offers to sell one, say, yellow-coloured, to B for ` 1.20 lakhs.
B agrees to buy the car for the price thinking that A is selling the other car red-coloured.
There is no consent and hence no contract. A and B have agreed not to the same thing but
are thinking for different cars.
(iii) A signed a promissory note which he was told was a letter of guarantee. He was held not
liable on the promissory note, as there was no consent and consequently no agreement
entered into by him.
Free consent. For a contract to be valid it is not only necessary that the parties consent but also
that they consent freely. Where there is a consent but no free consent the contract is voidable at
the option of the party whose consent was not free. Thus, free consent is one of the essentials
of a valid contract. A consent is said to be free when it is not caused by: (i) coercion, (ii) undue
influence, (iii) fraud, (iv) misrepresentation or (v) mistake.

4.2 Meaning of Coercion (Ss. 15 and 72)

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. [s.15].

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.

Example: A threatens to kill B (C’s son) if C does not let his house to A and thereupon
C gives his consent. This consent is no consent in the eye of law as the agreement is caused by
coercion.
Threat to commit suicide - Is it coercion? The doubt arises because suicide, though forbidden by
the Indian Penal Code, is for obvious reasons not punishable. A dead person cannot be punished.
But, since s.15 declares that committing or threatening to commit any act forbidden by the Indian
Penal Code is coercion, a threat to commit suicide should obviously be so regarded (suicide being
forbidden).

Example: A obtained a release deed from his wife and son under a threat of committing
suicide. The transaction was set aside on the ground of coercion [Ammiraju v. Seshamma (1917) 41
Mad.33].

Effect of coercion on the validity of contract (s.19A). 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 (s.72).

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.

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