Chp 4 FREE CONSENT AND VOID AGREEMENTS

Question 1

What is consent?

Answer 1

Two or more persons are said to consent when they agree upon the same thing in the same sense.

Question 2

What is Free consent?

Answer 2

Consent is said to be free when it is not caused by:

a) Coercion; or
b) Undue influence; c) Fraud;
d)Misrepresentation; e) Mistake (with certain exceptions).

Question 3

What is Coercion?

Answer 3

Coercion” is the committing, or threatening to commit, any act forbidden by the Pakistan Penal Code or the unlawful detaining, or threatening to detain, any property, to the prejudice of any person whatever, with the intention of causing any person to enter into an agreement.

The analysis of the above definition reveals that coercion may be compelling a person to enter into a contract under pressure or a threat.

Question 4

Effect of coercion

Answer 4

• Voidable
• If rescinded, restore benefits
  _Burden of proof; who Rescinds

Question 5

Define Undue Influence?

Answer 5

• One party has close dominating position.
• and, use it to obtain unfair advantage.

Question 6

Effects of undue influence

Answer 6

-Voidable
- court may set aside the contract Absolutely or Conditionally.

Question 7

Presumption of Position to dominate

Answer 7

1. Real or Apparent Authority
   (i) Tax officer and taxpayer (ii) Police officer and accused being investigated (iii) Employer and employee.
2. Fiduciary Relationship
   (i) Parent and child (ii) Guardian and minor (iii) Advocate and client (iv) Trustee and benefician (v) Fiancé and fiancee.
3. Mental capacity effected
   (i) Doctor and patien
   (ii) Medical attendait and patient
   (iii)Family member and enfeebled old man

Question 8

Relationship where Not persumed domination

Answer 8

1. Husband and wife
2. Landlord and tenant
3. Principal and agent
4. Creditor and debtor

Question 9

Definition of fraud?

Answer 9

1. A person gives false statement, and person a Knows it to be false.
2. Active Concealment of fact.
   (Active Concealment. v/s Silence)
3. Empty promise
4. Any other Act declared by law.

Question 10

Definition of Misrepresentation?

Answer 10

1. A Person gives which is False a statement
   -but person beleives it true.
2. Breach of duty
3. Mistake about Subject Matter.

Question 11

Essential of Misrepresentation.

Answer 11

1. By Party or his Agent. (Not by strangers.)
2. Person believes it true.
3. Relates to a fact.
   (Not Opinion)
4. Acted by other party on the basis of Representation.

Question 13

Effects of Misrepresentation.

Answer 13

“Voidable” but not in following cases.
1. Aggrieved party could have discovered with ordinary deligence.

2. Aggrieved party did not act on basis of misrepresentation.
3. Aggrieved party takes benefit after becoming aware.
4. If an innocent third Some party has acquired some interest in property.
5. If parties cannot
   be restored to original position.

Question 14

Essentials of Fraud

Answer 14

1. By a party / his Agent. (Not by Strangers)
2. Person Knows it to be False.
3. Related to the Fact. (Not Opinion)
4. Acted by other party on the basis of false statement.
5. Other party suffered losses.

Question 15

Effects of Fraud

Answer 15

Voidable, but not in following Cases;

1. Aggrieved party could have discovered with ordinary deligence.

2 Aggrieved party not acted on the basis of Fradulent statement,

3. Aggrieved party takes benefit after becoming Aware.
4. If an innocent third party aquired
   Some interest.
   (i) Good Faith,
   (ii)Consideration.
5. If Parties can’t be restored to their Original Position.

Damages (if Suffered loss) Aggrieved party can claim.

Question 17

Void Agreements

Answer 17

1. Uncertain Agreements..
2. illegal Agreements.
3. Impossible Agreements.
4. Agreement with incompetent person.
5. Agreement made without Consideration.
6. Agreement in Restraint of Marriage.
7. Wagering Agreement.

8.Agreement in Restraint of Trade.

9. Agreement in Restraint of legal Proceeding.

Question 17

Difference b/w coercion and undue influence?

Question 18

Define Mistake?

Answer 18

1. On Fact
   -Unilateral (Valid)
   -Bilateral (Void)
2. On Law
   -Pakistani Law (Valid)
   -Foreign Law
   ~ Unilateral (Valid)
   ~ Bilateral (Void)

Question 19

Exceptions of wagering Agreements

Answer 19

1. Prize competition involving Game of skill.
2. Winner of horse Race.

Question 21

Effect of Unlawful Agreements

Answer 21

1. illegal Agreement are void.
   (Whether illegal initially or subsequently)
2. Collateral Agreements are also void.
3. No remedy is allowed.
   (Neither damages, Nor Restitution.)

Question 22

Payment in respect of Wagering Agreements.

Answer 22

~Representative of deceased.
~Guardian of minor.
Is not entitled to recover if;
Payment made in respect of wagering agreements.

Question 23

Exception of agreement in restraint of trade

Answer 23

1. Sale of goodwill / business.
   _Restrictions for similar business
   _For specified local limits which are reasonable.
   _For time till buyer carried similar business.
2. B/w partners
   ~Outgoing partners / dissolution of firm
   ~Existing partners (similar or dissimilar)