Test: Concept of Free Consent - CLAT PG MCQ

A fiduciary relationship, where one party places trust and confidence in another, often indicates that the person may be in a position to dominate the will of the other party. This dynamic can lead to potential exploitation, making it easier to claim undue influence if the relationship is abused.

The distinction lies in that duress typically involves actual or threatened violence against a person, while coercion can include threats to property or other forms of pressure. This distinction affects how legal remedies are applied in cases of undue influence.

For misrepresentation to be established, the statement must be false and material to the contract, meaning it significantly impacts the agreement. Misrepresentation can occur even if the party making the statement believes it to be true, as long as it is later proven false.

In this case, the husband threatened to commit suicide to force his wife and son to sign a property release deed. The court found that this threat constituted coercion, making the agreement voidable under the Indian Contract Act. This highlights that coercive threats can take various forms, including personal harm.

If a contract is based on misrepresentation, the aggrieved party has the right to either rescind the contract or pursue damages. This legal remedy aims to restore fairness and address the wrong caused by the misleading information.

A Pardanashin Woman refers to a woman who is completely removed from ordinary social interactions, which can lead courts to presume undue influence in contracts involving her. The presumption arises due to her potential vulnerability and lack of social engagement, which may affect her ability to give free consent.

Fraud includes making a promise without the intention of fulfilling it, as this is a deliberate attempt to deceive the other party into entering a contract. It is crucial to differentiate between intentions and actions to determine the presence of fraud.

To substantiate a claim of undue influence, there must typically be proof of a fiduciary relationship where one party has the capacity to dominate the will of the other. This relationship allows for the possibility that the dominant party could exert undue influence over the weaker party.

Undue influence is exemplified by a parent pressuring a child to sign a contract, as it shows a dominant position where the parent exploits their authority to gain an advantage. Such dynamics often compromise the child's ability to provide free consent.

Active concealment involves taking steps to hide crucial information from another party, leading them to make decisions based on incomplete or false information. This behavior is treated as fraud because it directly undermines informed consent.

'Real authority' refers to power that is publicly recognized and legitimately held, such as the authority of police officers or employers. When individuals misuse this authority for personal gain, it can lead to claims of undue influence.

Mutual agreement is not a factor that influences consent negatively; rather, it is an essential condition for forming a valid contract. In contrast, coercion, fraud, and misrepresentation can all compromise the validity of consent, leading to a voidable contract.

Coercion is defined as the act of obtaining consent through force or threats, which means that one party uses intimidation to compel another to agree to a contract. This undermines the voluntary nature of consent that is essential for valid agreements.

Fraud is defined under Section 17 of the Indian Contract Act, which outlines various acts that constitute fraud, including false statements and active concealment. Understanding this section is vital for assessing the legality of contract agreements.

Mere silence does not constitute fraud unless there is a legal obligation to disclose certain facts, or the context of the situation makes silence equivalent to misrepresentation. This principle emphasizes the importance of transparency in contractual agreements.

In cases of undue influence, the burden of proof lies with the claimant to demonstrate that the stronger party exerted influence over the weaker party, thereby preventing the latter from exercising free choice in the agreement. This is crucial to establish the validity of the claim.

A bilateral mistake occurs when both parties are mistaken about a crucial fact, rendering the contract void due to the lack of genuine consent. This legal principle ensures that agreements are based on accurate and mutual understanding of essential facts.

'Consensus-ad-idem' refers to a mutual understanding between the parties regarding the terms of the contract. It is essential for valid consent, as it ensures that all parties are aligned in their understanding of the agreement's subject matter.

If both parties are mistaken about the subject matter of a contract, the contract is considered void. This means it has no legal effect, as genuine consent based on a mutual understanding is absent.

For consent to be deemed 'free' in contract law, it must be given voluntarily, without any form of coercion or undue pressure. This ensures that all parties have a genuine and mutual understanding when entering into the agreement.