What is Free Consent? Simple Explanation & Importance in Agreements
As described in Section 13 of the Indian Contract Act, when a mutual understanding between two parties gets established in order to satisfy particular planning, can be termed as consent. People often get confused between consent and free of consent.
Consent is a contract between two or more parties to agree with a mutual commitment to achieve a desire or any other. Free consent in business law helps to understand all the legal rules which we need to follow in business. Explore this page to learn what free consent means, why it matters in legal contexts, and how it affects the validity of agreements. Whether you're drafting a contract or entering into an agreement, understanding the role of free consent can help you navigate the process with confidence.
What is Free Consent?
Let us define free consent as a contract based on Section 13 of the Indian contract act 1872 is, the meaning of free consent is an agreement made between two parties for the same purpose with the Union of thoughts. It is under the principle of consensus-ad-idem. It is the definition of free consent. In simple terms A Contract Without Free Consent Is called Free Consent In Contract Law.
Free Consent Examples
Example 1: In order to understand more clearly, let us illustrate a case of free consent. Let us assume A and B are two parties, and 'A' had some financial crisis, so he wants to make a contract. After knowing all the information and after analyzing the situation, 'B' wants to accept the contract made by 'A'. Here the contract or agreement is made with the mutual consent of both the parties. This is nothing but the free consent of the contract.
Example 2: You visit a store and decide to buy a phone after reading its features and price. You agree to the purchase without any pressure or false promises from the seller. This is an example of free consent.
Example 3: You sign a rental agreement with a landlord after fully understanding the terms, such as rent amount, deposit, and duration. If no one forces you to agree, your consent is free.
Example 4: Two businesses agree to collaborate after discussing terms and conditions openly. Both parties willingly sign the agreement after understanding its details, ensuring free consent.
Example 5: Two individuals decide to get married without being forced by family or circumstances. Both freely express their willingness to marry.
Difference Between Consent and Free Consent
Even though the meaning of both consent and free consent seems to be similar, slight differences are observed when we go through them in detail. Now we will see the differences between consent and free consent, where it varies and the importances etc. in detail as follows-
Elements:- The elements of consent are limited to a similar purpose as well as the same sense of mind. On the other hand, the elements of free consent should be free from fraud, coercion, undue influence, misrepresentations, and other mistakes too.
Void: The contract will be voidable if there is no consent. In contrast, the voidability of the contract will be decided by the aggrieved party in the absence of free consent.
Elements of the Free Consent
Free consent is valid when the agreement between parties is made without any external pressure or manipulation. Here are the key elements of free consent:
No Coercion: Consent must be given voluntarily, without the use of force, threats, or intimidation. For example, a contract signed under the threat of harm is not free consent.
No Undue Influence: One party should not misuse their position of power to influence the other unfairly. For instance, a boss pressuring an employee to sign a contract isn’t free consent.
No Fraud: Consent must be based on truth. If one party is deceived by lies or false statements, the consent is not free. For example, selling a faulty product by hiding defects is fraudulent.
No Misrepresentation: Any agreement made based on incorrect information, even if unintentionally provided, is not free consent. For example, giving wrong details about a property before selling it.
No Mistake: Consent is not free if both parties are mistaken about important facts of the agreement. For instance, agreeing to buy a specific item, but misunderstanding the price or features.
Violating Factors of Free Consent
We have various factors that affect free consent, and it relates to the voidability of the contract. So both the parties participating in your contract should be aware of these factors and should be cautious for a free flow of the contract till it's the due date.
Consent is only considered as a mutual relationship between two parties whereas free of consent includes a mutual understanding as well as it's free from
Coercion: when a person unlawfully, threatens or forces a person via some forbidden acts, leads to coercion. It means the entry of either of the parties might be forceful or any of them committed to illegal activities or commitments against the Indian penal code etc. The effect of coercion leads to the cancellation of the entire contract after investigating thoroughly. The legal body will restrict the obligations of both parties in this case. If the commitment is done forcefully, clearly we can say that it is not free of consent.
Fraud: Another important factor of free consent is fraud. When a person provides false assertion, makes any promises in order to deceive a person or plans to get an advantage over the other party, then the act is considered as fraud. It involves the omission of promises made during the agreement, the false assertion of facts, false actions to cheat the other party, etc. and many more deceiving actions come under this fraud. According to Section 17 of the Indian law of contract, the other party has been given rights to claim for the deceived amounts as well as to revoke the entire contract and can make modifications where he got damaged.
Misinterpretation: Providing a false assertion or fake representation of the fact to the party or making unwarranted information to mislead the other party. According to Section 18 of the Indian law of contract, the misrepresentation is nothing but showing the false information at the beginning of the contract itself. The facts which are committed at the ground level may not be reliable, then it is considered as misrepresentation of the contract. Again here we have two kinds of misrepresentations-one is innocent misrepresentation and the other is a negligent misrepresentation.
Undue influence: when one of the parties has a dominating nature or uses its power to work against the will of the other party. Undue influence is another factor to violate free consent. It occurs when one of the other parties dominates the other party in any aspect. There is a chance of taking unfair advantage because of their dominating position on the other party. The principal behind undue influence is the doctrine of equity. The effect of undue influence leads to the voidability of the contract of free consent under Section 19 A. It requires valid proof to file a case on the dominating party. Generally, the undue influence affects the below parties -
Trustee and beneficiary
Husband and wife
Landlord and tenant
A person whose mental capacity is low
Old age
Doctor and patient
Tender age
Creditor and debtor
Real and apparent authority
Fiduciary relationship
Parent and child
Adult child and parent
Lawyer and client
Mistake: Mistakes can have so many impacts and it causes a lot of issues. It can be mutual or individual or can be of many types.
Pros and Cons of Free Consent
Pros of free consent: Free consent is considered as more reliable and flexible. The most important criteria the free consent satisfy can be listed below:
The contract made according to free of consent provides proper protection to the validity enforceability of an agreement.
It acts as a major protecting shield to the parties from various unavoidable circumstances.
It plays a major role to withstand the autonomous power and providing an unbreakable foundation to the running policy or principle.
Cons of free of consent: Although having a lot of advantages, free of consent also contains some kinds of mistakes too. These includes:
Unilateral mistake: when one side party makes a particular mistake, then it is termed a unilateral mistake.
Bilateral mistake: As the name suggests, when both the parties get involved in mistakes, then it is termed a bilateral mistake. This can be further classified into two types:
Mutual mistake: A mistake is said to be mutual when both parties misunderstood each other's policy forming a void, then it is termed as a mutual mistake.
Common mistake: Avoid that arises due to a common mistake in the contract is termed a common mistake. But this mistake is not mutual and is done individually.
Conclusion
Free consent arises from mutual trust between both parties. It occurs when both sides agree on the same matter in the same way. For consent to be free, both parties must be in complete agreement. This article covers everything about free consent, including its definition, importance, key elements, common mistakes, and examples of its violation.
FAQs on Free Consent In Contract
1. What is 'free consent' as defined in the Indian Contract Act, 1872?
According to Section 14 of the Indian Contract Act, 1872, consent is considered 'free' when it is not caused by coercion, undue influence, fraud, misrepresentation, or mistake. In simple terms, it means that all parties must agree upon the same thing in the same sense (consensus-ad-idem) willingly and without any external pressure or deceit.
2. Why is free consent considered essential for a valid contract?
Free consent is the foundation of a legally enforceable agreement. Its importance lies in:
- Upholding Validity: It ensures that the contract is legally valid and binding.
- Protecting Parties: It protects individuals from being forced or tricked into agreements that are not in their best interest.
- Ensuring Fairness: It promotes fairness and trust between the contracting parties, as it confirms that the agreement was made on a voluntary and informed basis.
3. What are the key elements that must be absent for consent to be considered free?
For consent to be free, it must be given without the presence of the following five elements:
- Coercion (Section 15): Forcing someone into a contract through threats or unlawful acts.
- Undue Influence (Section 16): Using a position of power or authority to unfairly dominate the will of another party.
- Fraud (Section 17): Intentionally deceiving another party to enter into a contract.
- Misrepresentation (Section 18): Providing false information, even if unintentionally, which misleads the other party.
- Mistake (Sections 20, 21, 22): An erroneous belief about a matter of fact or law, which is essential to the agreement.
4. What is the legal consequence if a contract is entered into without free consent?
If consent is obtained through coercion, undue influence, fraud, or misrepresentation, the contract is voidable at the option of the party whose consent was not free. This means the aggrieved party can choose to either cancel the contract or proceed with it. However, if consent is affected by a bilateral mistake of fact, the contract is considered void from the beginning.
5. How is 'coercion' different from 'undue influence' in contract law?
While both involve improper pressure, they differ significantly. Coercion involves the use of or threat to use physical force or illegal acts, which is a criminal offence. The relationship between parties is not necessary. In contrast, undue influence involves the use of moral or mental pressure where one party holds a dominant position over the other (e.g., doctor-patient, lawyer-client). It is not a criminal act but relies on the pre-existing relationship to invalidate consent.
6. What is the key distinction between 'fraud' and 'misrepresentation'?
The primary difference lies in the intention. Fraud is an intentional act of deception, where a person knowingly makes a false statement to trick the other party. The goal is to deceive. Misrepresentation, on the other hand, is an innocent mistake where a false statement is made without any intention to deceive the other person. The person making the statement genuinely believes it to be true.
7. Can staying silent about a crucial fact amount to fraud in a contract?
Generally, mere silence is not fraud. However, it can be considered fraudulent in two specific situations:
- When there is a duty to speak, such as in contracts of utmost good faith (e.g., insurance contracts) or fiduciary relationships.
- When the silence itself is equivalent to speech, for example, if a buyer asks a specific question and the seller remains silent to conceal a defect.
In these cases, deliberate silence about a material fact can invalidate the contract.
8. How does a 'mistake of fact' affect a contract compared to a 'mistake of law'?
A 'mistake of fact' and a 'mistake of law' have different impacts on a contract. A bilateral mistake of fact (where both parties are mistaken about an essential fact) makes the contract void. However, a mistake of law (misunderstanding a law in force in the country) does not make the contract voidable, because everyone is expected to know the law of their own country. The principle is 'Ignorantia juris non excusat' (ignorance of the law is no excuse).
9. In cases of undue influence, who is responsible for proving that consent was not freely given?
The burden of proof initially lies on the person who claims their consent was caused by undue influence. They must demonstrate that the other party was in a position to dominate their will and used that position to gain an unfair advantage. Once this is established, the burden shifts to the dominant party to prove that the consent was, in fact, freely given and the contract was fair.
10. Can you provide a simple example of a contract with free consent?
Certainly. Imagine you walk into a bookstore, see a novel with a price tag of ₹500, and decide to buy it. You go to the counter, pay the amount, and the cashier gives you the book. In this scenario, you (the buyer) and the bookseller (the seller) have agreed on the same thing (the specific book) for the same price. Since there was no force, threat, or deception involved from either side, this is a perfect example of a contract formed with free consent.
