Understanding Free Consent and Contract Discharge

Free Consent

Free Consent, as defined in Section 13, occurs when "two or more persons agree upon the same thing and in the same sense."

For example, if A agrees to sell his car to B, but A intends to sell his Maruti while B believes he is buying A's Honda, there is no consent because they haven't agreed on the same thing in the same sense. Consequently, there is no contract.

Section 14 states that consent is considered free when it is not caused or affected by the following:

• Coercion
• Undue Influence
• Fraud
• Misrepresentation
• Mistake

Coercion (Section 15)

Coercion involves using force or threats to compel a person to enter into a contract. The consent obtained under coercion is not free.

Undue Influence (Section 16)

Undue influence occurs when one party, due to their relationship, is in a position to dominate the other party and uses this influence to gain an unfair advantage.

Fraud (Section 17)

Fraud involves deceit by one of the parties, where one party deliberately makes false statements. If the misrepresentation is made with full knowledge of its falsity or recklessly without verifying its truth, it constitutes fraud and impairs free consent.

Fraud Elements

• Suggesting a fact that is not true, and the person suggesting it does not believe it to be true.
• The active concealment of facts.
• A promise made without any intention of performing it.
• Any other such act fitted to deceive.

Misrepresentation

Misrepresentation occurs when a party makes a false, inaccurate, or incorrect representation. Unlike fraud, misrepresentation is innocent and unintentional.

Discharge of Contract

1. Discharge by Performance: When the parties fulfill their obligations within the specified time and manner, the contract is discharged by performance.
2. Discharge by Mutual Agreement: If all parties mutually agree to replace, annul, remit, or alter the contract, the original contract is discharged.
3. Discharge by the Impossibility of Performance: If it becomes impossible for any party to perform their obligations, the contract is discharged. Impossibility can exist from the start (ab-initio) or arise later.
4. Discharge of a Contract by Lapse of Time: The Limitation Act of 1963 specifies a period for contract performance. If the promisor fails to perform and the promisee fails to take action within this period, the promisee cannot seek legal remedy, and the contract is discharged.
5. Discharge of a Contract by Operation of Law: A contract can be discharged by operation of law, such as through the insolvency or death of the promisor.
6. Discharge by Breach of Contract: If a party fails to perform their obligation according to the specified time and place, they have committed a breach of contract.
7. Discharge of a Contract by Remission
8. Discharge by Non-Provisioning of Facilities
9. Discharge of a Contract due to the Merger of Rights