Parties to the contract must give consent. Consent must be free. Free consent is one of the essential elements of a valid contract.
According to section 13 of the Act two or more persons are said to consent when they agree upon the same thing in the same, sense. The whole agreement must be consented to in the same sense.
When both parties agree upon the same thing in the same sense, they are said to be ad-idem. Where both the parties are not ‘ad-idem’ or when the minds of both parties are directed to different objects, there is no consent. Some instances when consent is not free:
1) Where a person endorses a bill of exchange which, he was told was signing as a guarantee.
2) Where a document is read over, but it is different from the one pretended to be read over, signature thereon would be of no force.
In one Blenkarn taking advantage of similarity of his name with Blenkiron & Co ordered goods from Lindsay & Co by writing his signature to look like Blenkiron. M/s Lindsay & Co mistook his order for that of Blenkiron. Blenkiron was a respectable firm. Lindsay & Co delivered the goods to Blenkarn. Blenkarn in turn sold the goods to Cundy and did not pay Lindsay & Co filed a suit against Cundy. It was held due to a mistake caused by Blenkarn, there was no real agreement between Blenkarn and Lindsay & Co. Cundy, therefore did not get any title to the goods as Blenkarn acquired no property in the goods.
Free Consent – When?
Parties consenting to the same thing in the same sense is not sufficient. Consent must be free. Section 14 of the Act proceeds to define “free consent” as under:
“Consent is said to be free when it is not caused by (1) coercion (2) undue influence, (3) fraud, (4) misrepresentation, or (5) mistake.
Consent is said to be so caused when it would not have been given but for the existence of such coercion undue influence, fraud, misrepresentation or mistake. When there is no ‘consent’ there is no contract at all. When there is consent but not ‘free consent’, the contract is void at the option of the party whose consent was not free. If consent is given under the first four circumstances, then the contract is void at the option of the party whose consent was so caused.
A consent induced by false representation may not be ‘free’ within the meaning of section 14, but it can nevertheless be real; and ordinarily the effect of fraud or misrepresentation is to render a transaction void only and most void.
When consent is caused by mistake of both the parties, then the agreement is void. It will, therefore, be observed that consent under the first four circumstances, i.e. under coercion, undue influence, fraud and misrepresentation makes the contract void, while consent under mistake of both the parties makes the agreement void.
Coercion is committing, or threatening to commit, any act forbidden by the Indian Penal Code, or the lawful detaining, or threatening to detain to detain any property, to the prejudice of any person whatever, with the intention of causing any person to enter into an agreement.
It is immaterial whether the Indian Penal Code is or is not in force in the place where the coercion is employed (Sec 15).
A, on board an English ship on the high seas, causes B to enter into an agreement by an act amounting to criminal intimidation under the Indian Penal Code. A afterwards sues B for breach of contract at Calcutta. A has employed coercion although his act is not an offence by the Law of England and although section 506 of the Indian Penal Code was not in force at the time when or at the place where the act was done.
When can coercion be established? – Essentials
For an act to be forbidden by the Indian Penal Code, there must not be merely a threat, but the act should be such as to be punishable under the Indian Penal Code.
In Amiraju v. Seshama ( 1918 – 41 Mad. 38) an interesting question on the point arose. A husband held out the threat of suicide to wife and son if they refused to execute a release in his favor. The wife and son executed a release in consequences of that threat. It was held that release was obtained by coercion. Coercion implies committing or threatening to commit some act which is contrary to law.