CONSENT CLAUSES- VOID AND VOIDABLE CONTRACTS

Under the general principles of Contract Law, when all the main elements of a contract come into existence, there is a contract recognized by law.This can also be described as a presumption at law. However like in all other areas of law, this is only the general rule and one needs to take note of the exceptions.

The general rule is that the Court will not give any assistance to a party whose cause of action is based on an illegality.

Contracts which are voidable under the Contracts Act 1950.

Section 10 of the CA 1950 states that all agreements are contracts only if they are made by the free consent of the parties.And free consent is defined in Section 14 CA 1950 as

" Consent is said to be free when it is not caused by -

(a) coercion, as defined in Section 15
(b) undue influence as defined in Section 16
(c) fraud as defined in section 17
(d) misrepresentation as defined in section 18
(e) mistake ( to be raed together with sections 21,22,23

Section 15- " Coercion is the committing, or threatening to commit any act forbidden by Penal Code or the unlawful detaining or threatening, any property, to the prejudice of any person whatever,with the intention of causing any person to enter into an agreement."

In the case of Kanhaya Lal v National Bank of India ILR (1913) the definition of coercion was interpreted to mean an unlawful act done "with the intention of causing the person to enter into the agreement."

Section 16 Undue influence
A contract is said to be induced by undue influence when 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.

Section 17
Fraud includes any of the following acts cimmitted by a party to a contract, or with his connivance,or by his agent, with intent to deceive another party thereto or his agent, or to induce him to enter into the contract:
(a)the suggestion, as to a fact, of that which is not true by one who does not believe it to be true
(b) the active concealment of a fact by one having knowledge of belief of the fact;
(c) a promise made without any intention of performing it.
(d) any other act fitted to deceive
(e) any such act or omission as the law specially declares to be fraudulent.

Section 18- Misrepresentation- includes

(a) 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

(b) any breach of duty which,without an intention to deceive, gives an advantage
to the person committing it, or anyone claiming under him, by misleading to his prejudice , or to the prejudice of anyone claiming under him; and

(c) 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.

Section 19 - Voidability of agreements without free consent

(1) When consent to an agreement is caused by coercion,fraud or misrepresentaion, the agreement is a contract voidable at the option of the party whose consent was so caused.

(2) A party to a contract whose consent was caused by fraud or misrepresentation,may, if he thinks fit, insisit that the contract shall be performed, and that he shall be put in the position in which he would have been if the representations made had been true.

Exceptions_ if such consent was caused by misrepresentation or by silence, fraudulent within th emeaning of Section 17, the contract is nevertheless not voidable, if the party whose consent was so caused had the means of discovering the truth with ordinary diligence.