The Doctrine of Free Consent and Undue Influence in Contract Law A Power-Packed Final Review for 18th BJS

 

Free Consent under the Specific Reference to Undue Influence

(The Contract Act, 1872)

 

Introduction: The Significance of Free Consent in Contracting

There must be free consent in contract law. Consent is when both or all of the parties to a contract accept the terms of the agreement. A contract may be voidable or void without the requirement of free consent. Forced, duped, or unduly influenced consent is not free consent.

What is Free Consent?

Free Consent means that all parties involved in a contract agree to the terms willingly, without any pressure, force, deception, mistake, or unfair influence. In simple terms, consent is free when it is given voluntarily and knowingly.

Consent is not free if it is obtained by:

• Force or threat (coercion)
• Fraud or misrepresentation (lying or hiding facts)
• Mistake about important facts
• Undue influence (one party unfairly dominating or controlling the other)

Only when consent is free is the contract valid and legally binding.

Understanding Undue Influence

Duress is where one party abuses their power, trust or authority over another party in a manner that is unfair or oppressive, to force or control the other party into an agreement. This is depriving the weaker party of freedom of choice.

As per Section 16 of the Contract Act, 1872:-

1 “Undue influence” is defined as “one in which the relations between the two parties are such that one party is in a position to dominate the will of the other and uses that position to obtain an unfair advantage.”

Elements of Undue Influence

§  Superior position: A party dominates or influences the other party by reason of a special relationship.

§  Weaker party: The other party is frail or reliant.

§  Unjust enrichment: The one who is lobbying benefits, unjustly, from this dominant position.

§  Absence of free will: Consent is not voluntary because it is a response to force or authority.

Typical Relationships in which Undue Influence Occurs

• Parent and child
• Guardian and ward
• Doctor and patient
• Lawyer and client
• Spiritual guide and disciple
• Employer and employee

Influence Inducing Contracts; Effect of Undue Influence on Contracts

Contracts induced by undue influence may be set aside. The other party whose interests are affected by the mistake can rescind or cancel the contract. Courts safeguard the weaker party by analyzing status and equity.

Sample Case Studies and Answers

Case 1: The caretaker and elderly woman

Facts:
A caretaker convinced an old lady to change the ownership of her property. The woman trusted and was strongly influenced by the caretaker. The woman later said she was unfairly pressured.

Discussion:
The caretaker occupied a position of power and took advantage of the woman’s trust. The consent of the woman was not free and was under pressure of the caretaker. The transfer of the property would leave the caretaker with the upper hand. The agreement is voidable as per Section 16 of the Contract Act. The woman can go to court to annul the contract. This case shows the value of independent advice and protection for people who are unable to stand up for themselves.

Case example 2: Attorney/client relationship

Facts:
A lawyer talked his client into signing a contract that gave the lawyer a huge chunk of the client’s estate. He trusted the lawyer and didn’t understand all of the terms.

Discussion:
It is this trust and dependence upon which the lawyer-client relationship is based. The client had no legal advice of its own and was therefore a candidate for undue influence. The attorney leveraged the power imbalance to secure a lopsided contract. The agreement is voidable on the ground of undue influence. The client can request cancelation through the court.
Focuses on the moral responsibility of therapists not to utilize their clients.

Case 3: Physician and Patient

Facts:
One patient accepted an expensive treatment after the doctor repeatedly told her it was the only one. Some more affordable alternatives were available to the patient at a later time.

Discussion:
Doctor-patient is a fiduciary relationship of trust. The doctor might have coerced by not giving acquaintance. Consent of the patient was based on incomplete information. The agreement (treatment agreement) may be voidable. Patient might take a legal action or demand damages. Focuses on doctors’ ethical duty to offer complete information.

Conclusion

The consent must be free to make a contract valid. Free consent is ripped apart by undue influence which involves exerting coercion upon a weaker party. Contract Act, 1872 safeguards underprivileged parties who enter into such contracts by rendering such contracts voidable. The knowledge of this law helps maintain fairness in contracts.

 

 

This paper is prepared by Nazmul Hasan, Senior Judicial Magistrate, ranked 7th in the 11th Bangladesh Judicial Service Examination. He is a Prime Minister Gold Medalist (2017) and Agrani Bank Gold Medalist for Academic Excellence (2023). Author of the e-book Comprehensive Strategy for Excelling in the 18th Bangladesh Judicial Service Examination.

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