Free Consent under the Law of Contracts

Contracts form the backbone of commercial and legal transactions and their validity hinges upon the presence of free consent. 

Free consent refers to the voluntary agreement of parties without any undue influence, coercion, mistake, fraud or misrepresentation. 

 What is Free Consent?

Free consent is a fundamental principle in contract law that ensures the validity and enforceability of agreements. It signifies that the parties involved in a contract must enter into it willingly, without any external pressure or manipulation. 

When free consent is present, it demonstrates that both parties have genuinely and freely agreed to the terms and conditions of the contract.

Free consent is a cornerstone of contract law, ensuring that agreements are entered into voluntarily and without coercion, undue influence, mistake, fraud or misrepresentation. 

Coercion

Coercion refers to the act of compelling someone to act against their will by using threats or force. In the context of contracts, coercion can vitiate free consent and render the agreement voidable. It is crucial to understand the elements of coercion, such as the threat of physical harm, imprisonment or significant financial loss, that can undermine the voluntary nature of consent.

Examples:

• A person is forced to sign a contract under the threat of physical violence.
• An individual is coerced into signing an agreement by their employer, who threatens to terminate their employment if they refuse.

Undue Influence

Undue influence occurs when one party exerts excessive control and influence over the other, exploiting a position of power or trust. It undermines the autonomy of the party being influenced and impairs their ability to give free consent. Undue influence can arise in relationships where there is a fiduciary duty, such as between a doctor and a patient or a lawyer and a client.

Examples:

• A wealthy individual manipulates a vulnerable elderly person into changing their will to favour the former.
• An employer uses an employee’s financial difficulties to coerce them into signing an unfair employment contract.

Mistake

Mistake refers to an erroneous belief held by one or both parties at the time of contract formation. A mistake can be mutual or unilateral and may pertain to a fact or a law. When a mistake is material and goes to the root of the contract, it can invalidate free consent and render the agreement voidable.

Examples:

• Party A agrees to sell a painting to Party B, mistakenly believing it to be a replica when it is, in fact, an original.
• A buyer purchases a property, unaware that it has significant structural defects due to a mistake made by the seller in disclosing the information.

Fraud

Fraud involves the deliberate misrepresentation of facts by one party to deceive the other, inducing them to enter into a contract under false belief. It vitiates free consent and renders the contract voidable. Fraudulent misrepresentation may involve intentional concealment of information, false statements or half-truths.

Examples:

• A seller falsely represents that a used car has never been involved in an accident.
• A contractor deliberately inflates the cost of materials in a construction project, leading the client to pay more than the actual value.

Misrepresentation

Misrepresentation occurs when one party makes an innocent or negligent false statement of fact that induces the other party to enter into a contract. Unlike fraud, misrepresentation does not involve deliberate deception. However, it still affects free consent and can make the contract voidable.

Examples:

• A real estate agent mistakenly represents that a property has an updated plumbing system, unaware that it requires extensive repairs.
• An advertising campaign exaggerates the capabilities of a product, leading consumers to make purchasing decisions based on inaccurate information.