Free Consent of the Parties

Towhidul Islam PhD

Professor
Department of Law
University of Dhaka

Definitions
• Consent means an accord –
concurrence of opinion – union of
wills in the minds of the parties.
▪ Reaching a common point
▪ Section 13 says: ‘Two or more
persons are said to consent when
they agree upon the same thing in
the same sense.’
▪ Two statutory requirements –
✓ to the same thing and
✓ in the same sense.

• Consent is not said to be free

when it is caused by –
• coercion, as defined in section
15, or
• undue influence, as defined in
section 16, or
• fraud, as defined in section 17, or
• misrepresentation, as defined in
section 18, or
• mistake, subject to the provisions
of sections 20, 21 and 22.

• Consent is said to be so caused

when it would have been given
without the existence of –
▪ coercion,
▪ undue influence,
▪ fraud,
▪ misrepresentation or
▪ mistake.
• Coercion
• Section 15 says: "Coercion" is the
committing, or threatening to
 commit, any act forbidden by the
Penal Code 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.

• Requisites for coercion –

▪ Committing any act forbidden by
the Penal Code, 1860
▪ Threatening to commit any act
forbidden by the Penal Code, 1860
▪ Unlawful detaining any property
to the prejudice of any person
whatever
▪ Threatening to detaining any
property to the prejudice of any
person whatever

▪ The act, constituting coercion,

must be directed at any person
and not necessarily at the other
party to the agreement
▪ The act, constituting coercion,
must have been done or
threatened to be done with the
intention of causing any person to
enter into an agreement.

▪ It does not matter whether the

Penal Code, 1860 is or is not in in
 force in the place where the
coercion is employed.
▪ However, the following is not
coercion –
✓ threatening to prosecute
✓ threatening to charge high prices
or high interest rates
✓ threatening to commit suicide.

▪ Coercion denotes threats over the

person or property. However,
duress denotes threats over the
person.
▪ A contract brought about by
coercion is voidable under section
19 at the option of the party
whose consent is so taken.
• Undue Influence
• Section 16(1) says: 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.
• Under section 16(2) undue
influence may be presumed to
exist in the following cases –
▪ where one party holds a real or
apparent authority over the other
or where he stands in a fiduciary
relation (mutual trust and
confidence) to the other.
for example, relationship
between father and son, guardian
and ward, solicitor and client,
doctor and patient, student and
teacher.

▪ where one party makes a contract

with a person whose mental
 capacity is temporarily or
permanently affected by reason of
age, illness, or mental or bodily
distress.
• Undue influence is suspected in
cases of –
▪ fiduciary relationship
▪ inadequacy of consideration
▪ absence of independent advice
▪ material facts were hidden.

• Section 19A says: 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
thereunder, upon such terms and
conditions as to the Court may
seem just.

• Section 16(3) says: Where a

person who is in a position to
dominate the will of another,
enters into a contract with him,
and the transaction appears, on
the face of it or on the evidence
 adduced, to be unconscionable,
the burden of proving that such
contract was not induced by
undue influence shall lie upon the
person in a position to dominate
the will of the other.
• Distinctions
• Coercion – influence coming from
committing or threatening to
commit an offence; Undue
influence – influence coming from
the domination of the will of any
person over another.
• Undue influence – use of mental
pressure; coercion – use of
physical force.
• Misrepresentation
• Misrepresentation means making
of an inaccurate statement about
a fact to induce a person to
conclude a contract.
• Section 18 says:
“Misrepresentation" means and
includes –
▪ 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;

▪ any breach of duty which, without

an intent to deceive, gains an
 advantage to the person
committing it, or any one claiming
under him, by misleading another
to his prejudice or to the prejudice
of any one claiming under him
(contract of insurance);
▪ 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 says: 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.
• The affected party can –
▪ avoid
▪ insist that the contract be
performed and he be put in the
expected position.
• Failure to discover the truth with
due diligence brings in no remedy.

• Fraud
• Section 17 says: Fraud means and
includes –
▪ False statement
▪ Active concealment (under a duty
to disclose but not disclosed)
▪ Intentional non-performance
(purchase of goods without any
intention of paying for them)
▪ Fraudulent act or omission (not
disclosing material facts)

• Section 19 says: 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.
• The affected party can –
▪ avoid
▪ insist that the contract be
performed and he be put in the
expected position.
▪ claim for damages (no defence on
due diligence).

• Mere silence as to fact is not

fraud. – Section 17
▪ Silence is fraud in circumstances
where duty to speak (section 55
of the TP Act, 1882).
▪ Silence is fraud in circumstances
where silence is in itself
equivalent to speech.
• Distinctions
• Misrepresentation – No intention
to deceive; fraud – intention to
deceive.
• Misrepresentation – honest
statement; fraud – dishonest
statement.
• Misrepresentation – rescission of
contracts; fraud – rescission of
contracts and damages.
• Misrepresentation – due diligence
as a defence; fraud – no defence
on due diligence.
• Contracts Uberrimae Fidei
• Contracts Uberrimae Fidei are
contracts where law imposes
 upon the parties the duty to make
full disclosure of all material facts.
• In such contracts, if one of the
parties has any information
concerning the subject matter of
the transaction which is likely to
affect the willingness of the other
party to enter into the agreement,
he is bound to disclose the
information.

• Contracts Uberrimae Fidei are the

following –
▪ Contracts of insurance
▪ Contracts between fiduciaries
▪ Contracts for sale of immovable
property
▪ Allotment of shares of companies
▪ Family settlements.
• Mistakes
• Section 20 says: Where both the
parties to an agreement are under
a mistake as to a matter of fact
essential to the agreement, the
agreement is void.
• However, an erroneous opinion as
to the value of the thing which
forms the subject-matter of the
agreement is not to be deemed a
mistake as to a matter of fact.
• Mistake is of different types –
▪ Mistake of fact and mistake of law
▪ Unilateral mistake and bilateral
mistake
• Section 21 says: A contract is not
voidable because it was caused by
a mistake as to any law in force in
Bangladesh; but a mistake as to a
law not in force in Bangladesh has
the same effect as a mistake of
fact.

• A contract is not voidable merely

because it was caused by one of
the parties to it being under a
mistake as to a matter of fact.
▪ Mistake of fact = void
▪ Mistake of Bangladesh law = not
voidable
▪ Mistake of foreign law = void as
mistake of fact
▪ Unilateral mistake of fact = not
voidable
▪ Bilateral mistake of fact = void.