THE SIGNIFICANCE OF FREE CONSENT IN CONTRACT

Introduction.

It’s an elementary and established rule of law in contract that for a contract to be valid and legally enforceable before the court of law, among other things it must be concluded with a free consent. The aforesaid rule is enshrined in the provision of section 10 of the Law of Contract Act . Therefore this provision seems to suggest that a free consent is an essential element of any valid contract without which the contract is said to be vitiated are and more precisely void and as a consequence the parties to contract can not legally enforce it the court of law . 

Consent and Free Consent defined.

Consent, is concurrency of wills or alternatively, Consent can be defined as an act of reason, accompanied with deliberation, the mind weighing as in a balance the good or evil on each side . The provision of section 13 of Law of Contract Act , is to the effect that, parties to the contract are said to have consented when they actually agree on the same thing and in the same sense. Also the meaning of consent can be inferred from the provision of section 2 (1) (b) of the said law . To consent to something, generally, means to voluntarily agree to it.

Free consent, means that a person was to conclude a contract out of his own will or volition . Free consent has its special meaning in the law of contract. According to the provision of Section 14 of Law of Contract Act, a consent is deemed to be when is not obtained by either coercion, undue influence, fraud,  misrepresentation, or mistake as defined under section 15, 16, 17, 18, 20 of the law of Contract Act  respectively. Contracts  which  are  made with  taints of  the  above  factors  are  voidable  contracts  that is the affected  party  known  as  the  innocent  party  may avoid  it if  he so wishes as per section 19 (1) of the Law of Contract Act . However according  to  the  same  section the  contract is  not  voidable  if  the  innocent party had  the  means  to  discover the  truth by  due  diligence.

The significance of free consent of parties in the contract.

As it observed in the above discussion free consent is very much important element in law of contract, without free consent of contacting party, the performance contract is impossible. Thefore the significance of free consent of parties to contract is as follows:-

First and foremost, Free consent determines the valid and enforceability of an agreement concluded between the parties to contract. This position was affirmed in the case of Mikol  Bottlers  Ltd.  v  M/S  Dhillon  Kool  Drinks , where it was stated inter alia, for  agreement  to  be  valid  should  be  made  by  free  consent  of  the parties  apart  from  other requirements.   

Secondly, free consent protect the parties to contract in the event where they are compelled to enter into a contract under either fraud, coercion, undue influence, mistake or misrepresentation. This is sufficiently explained in the case of Andrew v. Mockford , where the defendants had issued a prospectus containing untrue statements and the plaintiff applied for 50 shares and was allowed the same but subsequently sued the defendants in damages for fraudulent misrepresentation. It was held that the defendants were liable as they were aware of the falsity of the statements. Therefore in the discussed case, it obvious the plaintiff was protected against fraudulent misrepresentation of the other part which removed his free will to contract.

Thirdly, with a free consent parties are autonomous to determine their terms and hence prevent them from making unconscionable bargains which are unfair bargains. In Lloyds Bank Co. Ltd v. Bundy , the plaintiff bank extended a loan to a business owned by the defendant’s son. The defendant guaranteed the loan to the tune of ₤1,000 but the bank required further guarantee. He extended it to ₤6,000. His lawyer informed him that it would be unwise to extend the guarantee further. The defendant owned a house with ₤10,000. An official of the plaintiff bank visited the defendant and procured a further guarantee of up to ₤11,000. The sons business collapsed and the bank sought to enforce the guarantee against the father who pleaded that it was unconscionable. It was held that the guarantee was voidable at the option of the defendant as it was unfair. 

Fourthly, free consent of parties to contract creates the meeting of minds (consensus ad idem) between them. There would only be contractual agreement when each party’s subjective understanding of the agreement matched exactly (“meeting of the minds”) . In Raffles v. Wichelhaus , where the parties agreed to pay for cotton being sent from Bombay on a ship called “Peerless.” However, unknown to the parties, there were two ships called “Peerless” carrying cotton from Bombay, and one contracting party intended the earlier ship, and the other the later ship. The court held that there was no contract because the parties’ minds did not meet. Therefore from the presented case its right to argue that, free consent is important in a contract as it largely determine the meeting of minds of contracting parties.

Fifthly, free consent secure the remedy for an aggrieved party, it was stated in Cundy v. Lindsay and Co. Ltd , where, A fraudulent person, Blenkarn ordered goods from Lindsay, his signature resembled that of a company named Blenkiron and Co. Lindsay and Co. had heard of Blenkinron and Co but had not dealt with them. Blenkarn had quoted an address on the same street as Blenkiron and Co. thinking that they were dealing with Blenkiron and Co. Lindsay and Co. dispatched the goods to the address. It was held that they were entitled to damages as Cundy had no title to the goods like Blenkarn before him as the contract was void.  

Lastly, free consent plays a major role in imposing liabilities for promises between the parties to contract , a typical free consent looks like a binding commitments and a typical promise must normally realize that he is undertaking liabilities which may in the last resort be legally enforced against him.

Generally, since free consent is an essential element of any valid contract as it determines its validity and its enforceability thereof, therefore it’s the duty of contacting parties to ensure free consent is given so as to assume some legal rights and obligations under the contract.

REFERENCE

BOOKS

Aliyah, P.S., (1986). Essay on contract. Clendon Press: Oxford.

Monaham, G., (2001). Essential Contract Law (2nd Ed). Cavendish Publishing (Australia) Pty Limited: London.

Nditi,N.N., (2004). General Principles of Contract Law in East Africa. Dar es salaam University Press Ltd: Dar es salaam.

STATUTE

Law of Contract Act [Cap 345 R.E 2002]

ARTICLES AND JOURNALS

Brian, H.B (2008). Consent in contract. Retrieved from http://www.Law.columbia.edu on 4th May 2017 at 10:00PM.

CASES REFERRED

Mikol  Bottlers  Ltd.  v  M/S  Dhillon  Kool  Drink [1995] AIR

Andrew v. Mockford [1876] 1 QB. 372

Lloyds Bank Co. Ltd v. Bundy [1975] QB 326

Raffles v. Wichelhaus  [1864] 159  E.R.  375,  2  Hurlstone  & Coltman  906  (Ct.  Exc)