Consent and Free Consent

Broken down

Section 13: consensus ad idem

Two elements, and both must be present.

1. The same thing. The parties must be agreeing about the same subject matter.
2. In the same sense. They must attach the same meaning to it. Two people may both be talking about "the shipment of cotton" and mean different shipments.

Consensus ad idem is Latin for "agreement to the same thing", and it is the phrase examiners expect to see used and explained. Where it is absent the case is one of mistake, and section 20 declares such an agreement void where both parties are under a mistake as to a matter of fact essential to the agreement. See [Mistake of Fact and Mistake of Law].

Section 14: the five vitiating factors

A vitiating factor is something that spoils an otherwise good consent. The Act lists exactly five and no more, and the list is closed: hardship, a bad bargain, or plain foolishness are not on it.

The last row is the odd one out and it is deliberately so. Four of the five make the contract voidable; mistake makes it void or does nothing at all. That is why section 14 lists mistake as "subject to the provisions of sections 20, 21 and 22" rather than flatly.

The "but for" test

The final paragraph of section 14 is easy to skim and it decides real cases. Consent is caused by one of the five factors only when it would not have been given but for that factor.

So the vitiating factor must have operated on the mind of the party. A threat that the other party never heard, a lie they never believed, or a misstatement they had already discovered and disregarded, does not make the contract voidable, because consent would have been given anyway. The Explanation to section 19 makes the same point for fraud and misrepresentation: one that did not cause the consent does not render the contract voidable.

A worked example

Nikhil agrees to sell "my car" to Preeti for four lakh rupees. Consider four versions.

• Version one. Nikhil owns two cars, a Swift and a Fortuner. He means the Swift and Preeti means the Fortuner, and nothing in their dealings shows which. There is no consensus ad idem: they have not agreed on the same thing. Section 13 is not satisfied and the agreement is void under section 20 as a bilateral mistake as to a matter of fact essential to the agreement.
• Version two. Nikhil owns one car and both know which. Preeti agrees because Nikhil has threatened to file a false criminal complaint against her brother. There is consent under section 13, but it is not free: this is coercion under section 15 and the contract is voidable at Preeti's option under section 19.
• Version three. Nikhil tells Preeti the car has run thirty thousand kilometres, knowing it has run ninety thousand. Consent exists, and it is caused by fraud under section 17. Voidable at Preeti's option, and she may instead insist that the contract be performed and that she be put in the position she would have been in had the statement been true, under the second paragraph of section 19.
• Version four. Nikhil says thirty thousand kilometres, honestly believing it because that is what the previous owner told him. This is misrepresentation under section 18, and the contract is voidable. But if Preeti had the service records in her hand and could have discovered the truth with ordinary diligence, the Exception to section 19 bars her from avoiding it.

Notice what changes across the four. Only in version one is there no contract at all. In the other three there is a contract, it binds Nikhil throughout, and it is for Preeti to decide whether to keep it or set it aside.

Consent distinguished from free consent

The practical difference. If the agreement is void, a buyer who resells to an innocent third party gives that third party nothing, because he had nothing. If the contract is merely voidable, the buyer had a good title until avoidance, and an innocent purchaser for value who buys before the contract is avoided keeps the goods.

What it does NOT mean

"Free consent means consent given without pressure of any kind." Commercial pressure is not coercion. A hard bargain driven by a party with more bargaining power is not by itself any of the five factors, although an unconscionable standard form imposed on an unequal party may fall under section 16(3) or section 23.

"Absence of free consent makes the agreement void." Only mistake does that. The other four make the contract voidable, and the difference decides who may sue, what happens to benefits already received, and whether a third party is protected.

"If a party did not read the document, there is no consent." Failing to read is ordinarily no answer. A person who signs is generally bound by what they signed, and the question becomes whether one of the five factors was present. This is why standard form agreements needed separate treatment, in [Standard Form Agreements].

"Any one of the five can be pleaded loosely." Each is separately defined and separately proved, and the burden lies on the party alleging it. A plea of undue influence in particular must be pleaded with particulars, as [Undue Influence] shows.

Quick revision

• s.13: consent is agreeing upon the same thing in the same sense, that is consensus ad idem.
• s.14: consent is free when not caused by coercion (15), undue influence (16), fraud (17), misrepresentation (18), or mistake (20 to 22).
• The but for test: the factor must have operated on the mind; consent is caused by it only if it would not have been given but for it.
• No consent at all: VOID. Consent but not free: VOIDABLE, ss.19 and 19A.
• Mistake is the odd one out: void if bilateral and essential (s.20), otherwise generally no effect (ss.21, 22).
• Voidable means valid until avoided, so an innocent third party who buys before avoidance is protected; under a void agreement nothing passes at all.

Test yourself

1. Define consent and free consent, and say why the Act separates them. Section 13 defines consent as two or more persons agreeing upon the same thing in the same sense, that is consensus ad idem. Section 14 defines free consent as consent not caused by coercion, undue influence, fraud, misrepresentation or mistake. They are separate because the consequences differ: absence of consent means there is no agreement at all and it is void, whereas consent that is not free produces a real contract that is voidable at the option of the injured party.

2. List the five factors that destroy free consent, with their sections and effects. Coercion, section 15, voidable. Undue influence, section 16, voidable under section 19A. Fraud, section 17, voidable. Misrepresentation, section 18, voidable. Mistake, sections 20 to 22, void where both parties are mistaken as to an essential matter of fact and otherwise generally without effect.

3. What does the last paragraph of section 14 add? The but for test. Consent is treated as caused by one of the five factors only where it would not have been given but for that factor, so the factor must actually have operated on the mind of the party. A lie that was never believed, or a threat never communicated, leaves the contract untouched.

4. Why does the void or voidable distinction matter to a third party? Because a voidable contract is valid until it is avoided, so title passes in the meantime and an innocent purchaser for value who buys before avoidance keeps what he bought. Under a void agreement no title ever passed, so the purchaser takes nothing however innocent he was.

5. A buyer signs a contract without reading it and later says he never truly consented. Is that enough? No. Failing to read is ordinarily not an answer, and consent under section 13 is judged by what the parties agreed upon rather than by what one of them troubled to read. He must bring the case within one of the five factors in section 14, and prove it.