Directions: Read the following passage and answer the question.
Every day-to-day transaction that is conducted involves the usage of contracts, whether verbal or written. Contracts are an indispensable part of any individual's life and are utilised at every part.Contracts are essentially a bundle of rights and obligations that tend to bind one party with another in exchange for some consideration. The Indian Contract Act is one of the oldest mercantile laws of our country. It came into effect on the 1st of September 1872. It is the principal law regulating contracts in India. Indian Contract Act frames and validates the contracts or agreements between various parties. Contract Act is one of the central laws that regulate and oversee all the business wherever there is a case of a deal or an agreement.The following section will tell us what a contract is. To form an agreement, one party has to make the proposal and other has to accept it. It means that there must be two parties and no one can enter into an agreement with himself. A contract must involve a consideration and the parties must have the capacity to contract.
A person is said to be of sound mind for the purpose of making a contract, if, at the time when he makes it, he is capable of understanding it and of forming a rational judgment as to its effect upon his interests." A person who is usually of unsound mind, but occasionally of sound mind, may make a contract when he is of sound mind. A person who is usually of sound mind; but occasionally of unsound mind, may not make a contract when he is of unsound mind.
Consent is crucial for an agreement and thus for a valid contract. If two people reach a similar agreement in the same sense, they are said to consent to the promise. However, for a valid contract, we must have free consent which means that the two parties must have reached consent without either of them being influenced, coerced, misrepresented or tricked into it. In other words, we say that if the consent of either of the parties is vitiated knowingly or by mistake, the contract between the parties is no longer valid.
'Consent' defined. -Two or more persons are said to consent when they agree upon the same thing in the same sense. -Two or more persons are said to consent when they agree upon the same thing in the same sense."
Free consent' defined-Consent is said to be free when it is not caused by--Consent is said to be free when it is not caused by-"
(2) undue influence
Coercion means committing or threatening to commit, any act, or unlawful detention or threatening to detain, any property, with the intention of causing that person into the agreement.
Undue influence means Influence by which a person is induced to act otherwise than by his own free will or without adequate attention to the consequences thereafter. when one party is in a position to dominate the will of others and actually misuses the power, then it is a case of undue influence.Fraud means wrongful deception intended to result in that person to enter into a contract. Consent is said to be so vitiated when it would not have been given but for the existence of such coercion, undue influence, fraud, misrepresentation or mistake.
Misrepresentation" means and includes-
(1) the positive assertion, 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 which, without an intent to deceive, gains an advantage of 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.
A consent vitiated by mistake revolves around mistake of fact. This happens when both the parties misunderstood each other leaving them at a crossroads. Such a wrongful act or a mistake can be because of an error in understanding, or ignorance or omission etc. But a mistake is never intentional,it is an innocent commanding.
The main objective of this aspect of free consent is to be fair to both the parties and ensure that the judgment of either of the party was not clouded or influenced before entering into a contract. This doctrine helps in the promotion of individual autonomy and freedom to contract.
The entire structure of law of contract is based on the concept of consent, which is placed on the highest pedestal during any agreement. In order to validate the formation of a contract, the main ingredient would be the obtainment of genuine and free consent of the parties. Thus, the mere acquisition of consent is not enough but the consent must be obtained in a free and voluntary manner.
Q. Mr. Atwater was a dealer of dogs. He had several breeds of dogs which were put out for sale. There were two dogs named Alex- one dog was a German Shepherd and the other was a Golden Retriever. Abby wanted to buy Alex, the golden retriever. Abby: hi! I want to buy Alex.
Mr. Atwater: Ok sure. I will deliver it by tomorrow. Abby: Thank you.
Mr. Atwater sent the German Shepherd dog called Alex and by then the Golden retriever had died. Finding the misplaced dog Abby wanted to return the dog.