Meaning of Consent

When two parties are entering into a contract they should give their consent. The consent of the
parties means that they understand the same thing in the same sense. There must be no
misunderstanding between the parties about the subject matter of the contract. Section 13 of the
Indian Contract Act defines the term 'Consent' as two or more persons are said to consent when
they agree upon the same thing in the same sense. According to Black’s Law Dictionary Free
Consent is defined as "voluntary agreement by a person in the possession and exercise of
sufficient mental capacity to make an intelligent choice to do something proposed by another".1
Accordingly, consent requires the identification of minds in relation to the contract subject
matter. This is named ' consensus-ad-idem ' in English law. If the parties are not ad-idem on the
contract subject then there is no clear agreement between them. If two persons enter into a
contract relating to a particular person or thing and it turns out that each of them has a different
person or thing in mind, there would be no contract between them. For example, X has two
Trucks, one is white and the other Black. He wants to sell his black truck. Y who knows of only
X's white truck, offers to buy X’s car for Rs.80, 000. Y accepts the offer thinking it to be an offer
for his black truck. Here the two parties do not think on the same subject matter. Therefore,
consent is not given and the contract is not valid.
Concept of Free Consent
Free Consent is the fourth main crucial condition defined in Section 10 of Indian Contract Act
for the execution of the contract. Section 13of the Act says that when two or more persons are in
consent with each other when they agreed upon the same thing in the same sense. Occasionally,
there will be some misunderstanding where one party agree upon one thing and other party
agrees upon other thing without knowing. In such cases that is not a valid contract in eyes of law.
Definition
Free consent, it says that, "Consent is said to be free when it is not caused by2
 Coercion, as defined in Sec.15, or
 Undue Influence, as defined in Sec.16, or
 Fraud as defined in Sec.17, or
 Misrepresentation as defined in Sec.18, or
1
Black’s Law Dictionary.
2
Section 14 of ICA.
  Mistake, subject to the provisions of Sec.20, 21 and 22.
Vitiating factors and their effect
Where consent to an agreement is caused by coercion, undue influence, fraud or
misrepresentation, the agreement is a contract voidable at the option of the parties whose consent
was so caused.
Section 2(i)
An agreement which is enforceable by law at the option of one or more of the parties thereto, but
not at the option of the other or others, is a voidable contract. Where consent is caused by the
mistake, the agreement is void. Void agreement is not enforceable at the option of either party.3
COERCION
According to Section 15, coercion’ is the committing, or threatening to commit, any act
forbidden by the Indian Penal Code (45 of 1860) or 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.4
Explanation:
         It is immaterial whether the Indian penal code is or is not in force in the place where the
coercion is employed.
Technique of causing coercion:
          Consent is said to be coercion when it obtained by the pressure exerted by either of
following technique:
1. Committing or threatening to commit any act forbidden by the Indian penal code; or 
2. Unlawfully detaining or threatening to detain any property.

(i) Act forbidden by the Indian penal code: 

         It has been noted above that if a person commits or threatens to commit an act forbidden by
the Indian penal code with a view to obtaining the consent of the other person to an agreement,
the consent in such a case is deemed to have been obtained by the coercion.
This principle was pointed out in the case Ranganayakamma v. Alwar setti, 

3
Section 2(i) of Indian Contracts Act
4
Section 15
Fact: On the death of her husband, the husband’s body was not allowed to be removed from her
house for cremation, by the relative until she adopted the boy.            
Issue: whether validity of adoption of a boy by a widow, aged 13 years. 
Decision: The question before the madras high court lead to decision that the adoption was not
binding on the widow as her consent had been obtained by coercion.
In the case of "Chikkan Amiraju v. Chikkam Seshamal, 5A, a Hindu by a threat of suicide,
induced his wife and son to ensure a release deed in favour of his brother in respect of certain
properties claimed their own by the wife and son. The question before the court was whether. It
was an act of coercion of act. The majority said that the cut was forbidden by
I.P.C. and also threat to kill oneself was out where a person acts to his own prejudice and also to
the prejudice of his wife and son and thus requirement of sec. 15 were satisfied. Oldfield I had
different view from majority who said that suicide was not forbidden by I.P.C. ad a threat to do
that could not be considered to be threat to do a forbidden act within the meaning of
Sec.15 of Indian contract act.
The majority view in this case appears to be convincing. Committing suicide is a crime, which
gives no chance to punish wrong doer so it is to be said that the thereafter to suicide should
amount to be coercion. But it creates a need for amendment of Sec. 15. Sec. 15 does not include
that acts, which are punishable by other penal law, though they create coercion. So the law
commission of India in its report on the Indian contract act.6 and inclusion in the definition other
penal laws also, which says that the function of I.P.C. is to create offences and not merely to
forbid. It forbids only what it declares punishable so the word any act forbidden by I.P.C.' should
be dated a wider expression should be substituted so that the penal law other than the I.P.C. may
be included.
(ii) Detention of property:
           According to section 15, coercion could also be caused by 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.
For example:
 If an outgoing agent refuse to hand over the account book to the new agent until the
principle execute release in his favour, it is coercion. 
5
ILR 191841 Mad. 33.
6
13th Report 1954 p. 21.
  If the detention of property is not lawful, there is no coercion. Thus, if a mortgagee
refuses to the convey the equity of redemption except on the term dictated by him, there
is nothing unlawful in it and, therefore, no coercion is cased in this case.

Comparison with English law:

The following comparison has been attempted by the madras high court.
What the Indian law call coercion is called in English law ‘duress or menace’. Duress is said to
consist in actual or threatened violence or imprisonment of the contracting party or his wife,
parent or child, by the other party or by anyone acting with his knowledge and for his advantage.
But coercion as defined in the section 15 is much wider and includes the unlawful detention of
property also. Further, coercion may be committed by any other person, not necessarily the part
of contract. Again, it need not be directed against the contracting party, or his parent, wife or
child. It may be directed against any person, even if he is a stranger. While in English law, duress
must be such as will cause immediate violence and also unnerve a person of ordinary firmness of
mind, these requisites are not necessary in Indian law.
UNDUE INFLUENCE
The second element influencing consent, and making it un free, is undue influence. The word
undue influence means the inappropriate or unjust use of one’s superior power to gain the
consent of a weaker placed individual.
Section 16 (i) of the Contract Act defines undue influence as ‘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.7
If we evaluate this concept, it becomes clear two critical elements of undue influence:
 Relations between the parties should be such that one of them is capable of manipulating
the other's will.
 That place would have been used by the dominant party to get an unfair advantage over
the other.
All of these features must be present simultaneously. The existence of one without the other does
not unduly invalidate the contract.

7
Sec 16 0f ICA.
A person is deemed to be in position to dominate the will of another.
A. Where he holds a real or apparent authority over the other. The relationship between master
and servant, doctor and patient.

B. Where he stands in the fiduciary relation to the other. Relationship between father and son,
solicitor and client, trustee and beneficiary promoter and company etc.

C. where he maps a contract with a person whose mental capacity is temporarily or permanently
affected by reason of age, illness or bodily distress and relationship between a medical attendant
and his patient.
‘In the case of Mannu Singh v. Umadat Pandey a spiritual guru induced his devotee to give him
gifts of whole his property in return of a promise of salvation of the devotee. It was held that the
consent of the devotee was under undue influence.’8
‘In the case of Sher Singh v. Pirthi Singh, an literate villager aged about 90 yrs. physically
infant and mentally in distress, executed a deed of gift under the influence of his nearest relative
(who at the time formed a joint family) who looked after his daily dominate his well. 9 Similarly
in the case of Inche Nariah v. Sheich Ali Bin Omar, an illiterate old woman made a gift of deed
of practically the whole of her property to her nephew who managed her affair; it was hold the
gift should be set aside in the grand of undue influence.10

Contract with Pardanashin Lady

It is assumed that a deal with Pardanashin exercised undue control. A pardanashin woman is one
who practices total reclusion due to the tradition of the particular group she belongs to; she will
escape a contract unless the other party demonstrates that it was her smart and voluntary act.11
In the case of Ismaile Mussajee v. Hajiz Boo, it was held that a woman who goes to the court
and gives evidence, settles rents with her tenants and collects rents and communicates in matter
of business with men other than the member of the family is not a pardanashin woman.12

8
(1890) 12 All 523.
9
AIR (1975) All 259.
10
(1929) AC 127.
11
A.N.Chaturvedi ,Indian Contractact, (1984) Allahabad Law Agency id at p.114.
12
(1906) 33 Cal. 773.
In the case of Chidambaram Pillas v. Muthammas, it was held that a pardanashin lady may not
be illiterate. If she is fractionally, excluded from social inter course and communication outside
void, she will fall in this category.13

Effects of undue influence

 Section 19 of the Indian contract act provides that “when consent to an agreement is caused by
undue influence the agreement is a contract voidable at the option of the party whose consent
was so caused. Any such contract may be set aside either absolutely, or, if the party who was
entitled to avoid it has received any benefit there under upon such term and condition as to the
court may seem just.14
In the case of Sethani v. Bhanna, a sale deed of her property was executed by an old, blind,
illiterate and a blind woman in favours of respondent, on whom she was totally dependent. The
respondent was held to be bound to return the obtained advantages by him in this case. There
was no evidence of consideration having passed at the time of sale, or the respondent having
proved absence of undue influence. The respondent was held to be bound to return the obtained
advantages by him in this case.15
In the case of Kirpa Ram v. Sami-id-Din Ahmad Khan, respondent borrowed from the
appellants a sum of Rs. 900 executing a fond to pay compound interest at 2% menace, with
monthly rent. At the time of execution of bond, the respondent was 18 yrs. Old and was a known
thrift and drunkard. It was held to be unconscionable bargain and a court allowed only simple
interest on the set amount instead of compound interest.16
In the case of Vinayakappa v. Dulli Chand,17 case, there was a sale deed of a multithread
building situated on the main road wishing the municipal area. Looking to the commercial
property of the area, the consideration was extremely inadequate. Moreover, seller's brother
continued to occupy a portion of the property without paying any rent. The buyer of the property
did not pay any taxes on the same for a number of years. It was also found that the seller and the
buyer were having the relationship of borrower and money lender and thus had influence there,
13
(1993) ILW 466.
14
Section 19 of Indian Contracts Act.
15
AIR (1993) SC 956.
16
ILR (1903) 25 All 284.
17
AIR (1986) Bom. 193.
and the transaction was a loan transaction rather than the sale. No title therefore passed to the
buyer of the property.

Different between coercion and undue influence

    In both the case the consent of the party to the contract is not free and not voluntarily given. In
both the cases the contract is voidable at the option of one of the parties whose has been so
obtained. 
FRAUD
When a false statement is made with knowledge that it is false and also with the intention to
deceive the other party and make him enter into contract on the-basis is known as fraud.
According to Section 14 of Indian Contract Act, Fraud is defined as
Fraud exits when it is shown that:
1) A false representation has been made:
(a) Knowingly, or
(b) Without believe in its truth, or
(c) Recklessly, not caring whether it is true or false and the maker intended to out upon it.
2) There is a concealment of a material fact or a partial statement of fact in such a way that the
omission of what is not stated renders that which has been reported fraudulent.
Essential Element of Fraud
 To be a representation or ascertain which is false
Without the representation or ascertainment, there can be no fraud except in those cases where
silence can itself lead to fraud or where facts are effectively covered up. ‘If a representation is
true when it is made, but to the knowledge of party making it, but becomes the untrue before
entering into contract, it must be corrected. If it is not correct, the other party may rescind the
contract.’18
In the case of Peek v. Gurney case,19 the prospectus of a company did not refer to the document
existing there which discloses liability. This gave impression that the company was prosperous.
If the existence of document had been disclosed, the impression would have been quite different.
18
Section 17 of Indian Contracts Act.
19
(1873) LR 6 GHL 377: (1874) 43 LJ Ch. 19.
It was held that non-disclosure amount to fraud and anyone who purchased shares on the faith of
this prosperous could avoid contract.
In the case of With v. O’Flangan,20 the negotiation for the sole of a medical practice started in
January taking receipts fine of 2000. In May, when the contract was concluded the taking had
dwindled to of 5 a week. It was held that the contract would be rescinded as there was failure to
disclose the fall in takings.
 The representation must rebate to material fact which exists now or existed in past.
A mere opinion, commendatory or puffing expression or hearsay or flourishing description is not
regarded as representation of fact.
In the case of Bisset v. Wilkinson,21 the vender of a price of a land told a prospective purchaser
then, in his opinion, the land would carry 2000 sheep. In fact the land could carry a number less
than this. It was held it was no misrepresentation us the statement was one of opinion which was
honestly held.
The interpretation would have been made with the intention of causing the other party to behave
freely before the contract was concluded.
The representation must not only be false and made with the knowledge of its falsity, but it must
also be made with the intention of deceiving the other Party.
The representation or must have been made with an awareness of its reality, or without
confidence in its fact, or recklessly, not bearing whether it is right or wrong.
Further the representation amounting to fraud must have been made either by a party to contract
or with his agent or connivance.
In the case of Resse River Silver Mining Co. v. Smith,22 a company issued a prospectus giving
false information about the unfound worth of Neveda. A shareholder, who had taken shares on
the faith of the prospectus wanted to avoid the contract. It was held that he could not do so as the
false representation in the prospectus amounted to the fraud.
The other party must have been induced to act upon representation or ascertain.
A mere false hood is not sufficient to confer a right of action. The other party must have been
induced to act upon it. The other party cannot turn a blind eye to the obvious dejections or flows
which it could easily have ascertained by fair examination or inspection.

20
(1936) All ER 727: 1936 Ch. 525.
21
(1927) AC 177: (1926) All ER Rep. 343.
22
(1896) LR 4 HL 64.
Exceptions
Where silence is fraud
There is a general rule that absolute silence is no fraud. But there are situations that are unique to
it when it can be considered an act of deceit to keep silent. The following two exceptions are
stated in Explanation to Section 17.
1. Where there is duty to speak, keeping silence is fraud.
2. When silence, is in itself, equivalent to speech, such silence is a fraud.
MISREPRESENTATION (Sec 18)
A contract to which consent is induced by misrepresentation is the contract in which false
statements are made with the knowledge that it is true and also without the intention of deceiving
the other party and making him enter into a contract on that basis, it is called misrepresentation.23
Misrepresentation is defined in Sec.18, which says misrepresentation means and includes:
1. The positive ascertain, in a manner not warranted by the information of the person making it,
of that which is not true, though he believes it to be true.
2. Any breach of duty, without an intent to deceive again, 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.
3. Causing, however, innocently a party to an agreement to make a mistake as to the substance of
the thing which is the subject of the agreement.
4. Unwarranted Statements: When a person positively asserts that a fact is true when his
information does not warrant it to be so, though he believes it to be true, this to
misrepresentation.
The Calcutta High Court has held that a statement cannot be said to be warranted for the purpose
of Sub Sec (l) of Sec.18 of the Act where it is based upon mere hear say held in Mohan Lal v.
Sri Gangaji Cotton Mills Co.,24
In the case of Bombay Oceanic Steam Navigation Co. v. Soonderdas Dharmsay,25 The
defendant chartered a ship from plaintiff, who stated the ship was certain not more than 2800
tonnage register. As a matter of fact the ship had never been in Bombay and was wholly known

23
Section 18 of Indian Contracts Act.
24
(1899) 4 C.W.N. 369.
25
(1980) 14 ILR Bom. 241.
to plaintiff. She turned out to be of the registered tonnage of more than 3000 tones. It was held
that the defendants were entitled to avoid the charter party.
Where a representation acquires the status of being a term of contract and it turn out to be untrue,
the due advantaged party may not only avoid the contract but also sees for damages for breach.
Where in the course of negotiable for the sale of lamb, the seller stated the whole of the lot was
fully serviced, whereas this was not so, the buyer was allowed damages for the breach of
warranty.26

Breach of Duty:-
Any breach of duty which brings an advantage to the person committing it by misleading the
other to his prejudice is a misrepresentation. This clause is probably intended to all those cases
who are called in the court of equity cases of 'constructive fraud' in which there is no intention to
deceive, but where the circumstances an such as to make the party who derives a benefit from the
transaction equally answerable in effect as if he had been activated by motives of fraud or
deceit.27
In the case of Oriental Banking Corporation v. John Flemings,28
The plaintiff having no time to read the contents of a deed signed it as he was given the
impression by the defendant that it contained nothing but formal matter already settled between
them. The deed, however, contained a release in favor of the defendants. Accordingly, the
plaintiff was allowed to set aside the deed.
Inducing Mistake about subject matter:-
Causing, however innocently, a parts to an agreement to make a mistake as to the substances of
the thing which is subject of the agreement is also misrepresentation. The subject matter of every
agreement is supposed by the parties to possess certain value or quality. If one of the parties
leads the other, however innocently, to make a mistake as to the nature or quality of the subject
matter, there is misrepresentation.
Suppression of vital facts

26
(1975) 19 377.
27
Kiran Gupta S.P. Babuta Mercantile Law,1st Edition , Kalyani p.72,73
28
(1879) 3 Bom. 242.
 Cases of concealment or suppression will fall either under Sub Section (2) when amounts to
breach a duty or under Sub Section (3) when it leads the other party to make a mistake about
subject matter of the agreement. It is misrepresentation.
Misrepresentation should be of facts 'Commendatory Expressions' such as men of business
will habitually make about their goods and not sufficient to avoid the contract.
Change of Circumstances
There is often a gap of time between the representation and the ultimate conclusion of the
contract. Any change of circumstances in the meantime affecting the fact represented must be
bought to the knowledge of the other party.29 Which was held by court of appeal in With V. O.
Flangan' Inducement’
It is further necessary that misrepresentation must be cause of the consent, in the sense, that but
for the misrepresentation the consent would not have been given. Sec.19 explains this clearly.
Sec.19 says about the visibility of agreement without free consent. When consent to an
agreement is caused by coercion, fraud or misrepresentation the agreement is a contract voidable
at the option of the party whose consent was so caused.
A party to contracts whose consent was so caused, may fit insist that he shall perform the
contract, or rescind at and refused to be bound by it. The expression is justified by him.
They would be in position where they were before entering into contract.
Limits to the right of rescission
1. If the party whose consent is caused by misrepresentation affirms the contract besides the
rescind it. It will be valid and a binding contract on them.
2. A person having right to avoid the contract must do so in reasonable time. If he does not do so
it will amount to affirmation of the contract.
3. If the contract creates an interest of in favor of third time after some time, it would be amount
to affirmation not avoidance.
4. If a contract has been made in such way, to and some steps has been taken like exchange of
goods and the party is unable to restore goods then it amounts to affirmation because the goods
cannot be kept in its former position.

S.N. Maheshwari, S.K. Maheshwari; Amanual of Business laws; (2010) Himalaya Publishing House,
29

Bombay, India id at p.1.51

5. If the contract has been done and some steps has been taken, and this can't be taken into
former position. And the other party gives damages in lieu of rescission of contract. The contract
would amount affirmation.
MISTAKE
When the consent of the parties to the contract is caused mistake, it is not free consent which is
needed for validity of a contract. One or both of the parties may be working under some
misunderstanding or misapprehension of some fact relating to the agreement. If such a
misunderstanding had not been there, probably they would have not been caused by mistake.30
"An agreement is void where both the parties are under mistake of fact, where both the parties to
an agreement are under a mistake of fact essential to an agreement, the agreement is void.”31
Explanation: An erroneous opinion as to value of the thing which forms the subject matter of the
agreement is not to be deemed a mistake as a matter of fact. A agrees to buy from B a certain
horse. It turns out that the horse was dead at the time of Bargain; though neither the party was
aware of the fact the agreement is void.
When the type of mistake contemplated in Sec.20 is present in an agreement, the agreement is
void. Sec.20 requires that:
 Both the parties to the contract should be under a mistake, and
 Mistake should be regards a matter of fact.
 The fact regarding which the mistake is made should be essential to the agreement.
1. Mistake of both the Parties:-
Sec.20 makes the agreement void if there is mistake on the part of both the parties. But it
requires that the mistake should be bilateral. If the mistake is unilateral and having some
misimpression, the validity of the agreement is not affected thereby. Sec.22 of the Act clears it
which says, "Contract caused by mistake of one party as to matter of fact." A contract is not
voidable merely because it was caused by one of the parties to it being under a mistake as the
mistake of fact.
In the case of Ayekam Angahal Singh v. Union of India, 32 there was an auction for sales of
fisheries rights which was for highest bidding of some amount per year for 3 years. But the

30
Chawala and Garg, Industrial and Commercial law ) New Delhi Kalyani Publication id at p. 68, 69, 70.
31
Sec. 20 of Indian Contract Act, 1872.
32
AIR (1970) Manipur 16.
Plaintiff by mistake understood the amount for all three years. But it was unilateral mistake and
was not avoided by court.
2. Mistake of fact:-
There should be mistake of fact and not to law. The validity of the contract is not affected by
mistake of law. Regarding mistake of law the provision contained in Sec.21 is as follows:
Effect of mistake as to law - A contract is not voidable because it was caused by a mistake as to
any law in force in India. But a mistake as to law in force in India has the same effect as a
mistake of fact.
For instance A owe 'B' Rs. 1000/- Both A and B mistakenly think that the debt is time barred and
agreed that a may pay only Rs. 500/ to clear the debt. It is a mistake of law and the contract to
pay Rs. 500/ is valid.33
3. Mistake essential to the contract: -
It is also necessary that the fact regarding which the mistake is made should be essential to the
agreement. Whether the mistake is regarding a fact essential to the agreement or not depends on
a particular contract. In this view, a question arises that what constitutes essential facts. Speaking
broadly, certain facts are essential to every agreement. They are:
i) Mistake as to existence of the subject matter
If both the parties to contract believe in the existence of any subject matter, which in fact does
not exist, the agreement would be void. The reason is that if the subject matter of the contract has
already perished, there is nothing regarding which the contract is being made. Such agreement is
void for reason that the performance of the agreement is impossible. Sec.56 declares that an
agreement to do an act impossible in itself is void.
Sec.7 of Indian Sales of Goods Act, 1930 also declares that if there is a contract of sale of
specific goods but they are non-existent at the time of contract, the contract is void. When there
is a contract for sale of specific goods i.e. the goods identified and agreed upon at the time of
making of the goods are in existence. If in fact is not so the agreement is void.
In the case of Courturier v. Hastle,34 a man and a woman executed a separation deed, both of
them working under a common mistaken impression that they are married to each other.
Since fact of marriage was no existent, the deed was held void.

33
Section 21 of Indian Contract Act, 1872.
34
(1856) HLC 673 appeal from (1858) 9 Ex 102.
If the parties to the contract are not mistaken as to the subject matter, but not only regarding its
quality i.e. when the subject matter has been clearly identified although its quality has not been,
the arrangement would be valid.
In the case of Smith v. Hughis,35 A delivered some oats to B, B who returned it to A on thinking
that they were old which were in fact new. This was held the mistake was of age not the subject
matter. So it was held to be a valid contract.
Mistake as to possibility of performance of the contract
If the performance of any contract is not legally possible, then the contract would be void. For
instance, A agrees to take a lease of a Jishari from B. If it turns out that himself already the
tenant for life and B has no interest which could be transferred A. It is not legally possible for B
to perform the contract. The agreement having been entered into under mistake, to void.36
Mistake as to parties
If there is a mistake due to which the commitment does not represent the actual implementation
that was in the agreed agreement, such a contract will be void. In the case of Hartog v. Collins &
Sheids, it was held that there had arisen no contract in this case, because there could be have
noticed the mistake by the seller contained in their offer and because of their mistake the seller's
intention was not property reflected in the offer. Mistake as to Identity of the parties.
If I intend to enter into contract with ‘A’ for the purchase of goods for him and ‘I’ place the order
accordingly, 'B' cannot accept this offer and if 'B' supplies me the goods. I have no obligation to
pay to him because I never wanted to make any contract with him.
In the case of Boulton v. Jones,37 it was observed by C.B. that it was rule of law that a person
had intended to contract with A, B cannot give himself was given to Broclehurst. Possibility
Broclehurst might have adopted the act of plaintiff in supplying goods and maintained an action
for their price. But since the plaintiff has chosen to see, the only course the defendant could take
was to plead that there was no contract with him.
In the case of Said v. Butt, 38 the plaintiff wanted the first night performance of a certain play in
defendant theatre. But he knew respondent would refuse him as he has done it before so he

35
(1871) LR 6 Q.B. 597.
36
Cooper v. Phibbs (1867) 2 HL 149.
37
(1857) 2 H & N 564, 115 R.R. 595.
38
(1920) 3 KB 497.
contracted with him through his friend. Which was refused by respondent again. It was held no
liability arises of respondent.
Limitations
Mistake operates to avoid agreement subject to following limitation:
Mistake of Both Parties:
Under Sec.20 an agreement is void by reason of mistake, when both the parties are mistaken as
to a matter of fact essential to the agreement. This is further supplemented by Sec.22 that a
contract is not voidable merely because it was caused by one of the parties to it being under a
mistake as to matter of fact. There is no real consent where mistake prevents the parties from
coming to an agreement upon the same thing in the same sense.
The mistake of both the parties of which Sec.20 speaks may be either common or mutual.
Common mistake will definitely render. The agreement void if the parties are mistaken about the
existence of the subject matter.
In the case of Leaf v. International Gallaries,39a picture was sold, the seller representing that it
was by John Constable, when it turned out to be different. The picture was the essentially
different from what it was supposed to be, yet the contract was to be only voidable.
Contracts required to be in writing
Some of the contracts which have to be registered are as follows:
(1) Document of which registration is compulsory under Sec. 17 of the Registration Act of 1908.
(2) Contracts made out of natural love and affection between the parties standing in near relation
to each other, and made without any consideration.
(3) Transfer of any immovable property viz. Land, House, etc. (Transfer of Property Act).
(4) Memo and Articles of a Company (Sections 15 and 30 of the Companies Act)
CONCLUSION
Two or more persons are said to consent when they agree upon the same thing in the same sense.
Consent is said to be free when it is not caused by (i) coercion, (ii) undue influence, (iii) fraud,
(iv) misrepresentation, or (v) mistake.
Coercion is the committing or threatening to commit, any act forbidden by the Indian Penal
Code, or the unlawful detaining or threatening to detain any property 2 to the prejudice of any

39
(1950) 2 KB 86: (1950) All ER 693.
person whatever, with the intention c4f causing any person to enter into an agreement. In this
case the contract is voidable.
Where the relations subsisting between the parties are such that one party can dominate the will
of another and by using this positioned he obtains an unfair advantage over the other, the consent
is said to have been caused by undue influence and the contract is voidable.
A person is deemed to be in a position to dominate the will of another (a) where he holds a real
or apparent authority over the other, or where he stands in a fiduciary relation to the other, or (b)
where he makes a contract with a person whose mental capacity is temporarily or permanently
affected by reason of age, illness or mental or bodily distress.
Where a person who was in a strong position to dominate the will of' the other and the
transaction appears to be unconscionable, the burden of proving that the contract was not
induced by undue influence shall lie upon the person who was in a strong position. Willful
wrong representation of material facts with the intention to deceive the other party is fraud. For a
fraud, it is necessary that (i) a false representation or assertion is made, (ii) it must be of a fact,
(iii) it must be made with the knowledge of its falsehood or without belief in its truth or is made
recklessly, (iv) it must be made with the intention to deceive the other party, (v) the other party
must have acted on the basis of such representation, and (vi) the other party must have suffered
some loss. In case of fraud, the contract is voidable and the aggrieved party can also claim the
damages.
Misrepresentation refers to a mis-statement of material facts made innocently or the non-
disclosure of a material fact without any intention to deceive the other party. In case of
misrepresentation, the contract is voidable but the damages cannot be claimed.
Mistake is an erroneous belief concerning something. Mistake may be a mistake of law or a
mistake of fact.
Mistake of law can be of two types- (i) mistake regarding the law of the land (Indian laws), and
(ii) mistake regarding foreign laws. A) Mistake of Indian law is not excusable, while a mistake of
foreign law is treated .as a mistake of fact. A mistake of fact can also be divided into two groups:
(a) bilateral mistake, (b) unilateral mistake.
Bilateral mistake may relate to the subject-matter or -the possibility of performance. Mistake of
fact regarding subject-matter may be as to (i) existence of the subject-matter, (ii) identity of the
subject-matter, (iii) title of the subject matter, (iv) quantity of the subject-matter, (v) quality of
the subject-matter, (vi) price of the subject-matter. Such mistake of fact makes an agreement
void.
A unilateral mistake generally does not render the agreement void. But when there is a mistake
regarding the identity of the person contracted with or it relates to the nature of the contact, the
agreement is void.