It is essential to the creation of a contract that both parties should agree to the same thing in the same sense. Mutual consent, which should also be a free consent, is the sine qua non of a valid agreement and one of its essential elements is that a thing is understood in the same sense by a party as is understood by the other. Not only consent, but free consent is provided in Section 10 of the Indian Contract Act, 1872 to be necessary to the complete validity of a contract. Consent is free when it works without obstacles to impede its exercise. Where there is no consent or no real and certain object of consent, there can be no contract at all. Where there is consent, but not free consent, there is generally a contract voidable at the option of the party whose consent was not free. A general averment that consent was not freely obtained is not enough, and it is necessary to set up one of the vitiating elements such as fraud which includes, false assertion, active concealment, promise without intention of performing it, any other deceptive act, or any act declared as fraudulent. In order to constitute fraud, the act should have been done by the party to the contract, or by any other person with his connivance, or by his agent and with intent to deceive the other party thereto or his agent, or to induce him to enter into the contract. There is no duty upon parties to speak about facts likely to affect the other party’s consent to the contract and mere silence does not amount to fraud, unless the circumstances of the case show that there is duty to speak, or silence is, in itself equivalent to speech. On the other hand, misrepresentation falls into three categories: (i) a statement of fact, which if false, would be misrepresentation if the maker believes it to be true, but which is not justified by the information he possesses; (ii) any breach of duty which gains an advantage to the person committing it by misleading another to his prejudice, there being no intention to deceive; and (iii) causing a party to an agreement to make a mistake as to the substance of the thing which is the subject of the agreement, even though done innocently.
In which of the following statements will a contract not be voidable at the option of a party?
Correct Answer :
When silence amounts to fraud, but the other party whose consent was taken had discovered the truth or had the means of discovering the truth with ordinary diligence.
Solution :
The correct answer is: When silence amounts to fraud, but the other party whose consent was taken had discovered the truth or had the means of discovering the truth with ordinary diligence.
Step-by-Step Explanation:
1. Understanding Free Consent and Voidability:
According to Section 10 and Section 19 of the Indian Contract Act, 1872, free consent is an essential element of a valid contract. Generally, when consent to an agreement is caused by coercion, fraud, or misrepresentation, the agreement is a contract voidable at the option of the party whose consent was so caused.
2. Exception to Voidability (Duty of Ordinary Diligence):
There is a specific exception provided under Section 19 of the Indian Contract Act. If consent was caused by misrepresentation or by silence fraudulent within the meaning of section 17, the contract nevertheless is not voidable if the party whose consent was so caused had the means of discovering the truth with ordinary diligence.
3. Applying to the Options:
- Option 1 & 2: Contracts entered into by fraud or misrepresentation are generally voidable at the option of the aggrieved party.
- Option 3: Claiming that contracts entered into by fraud/misrepresentation are neither void nor voidable is legally incorrect.
- Option 4: This option explicitly states the exception where silence amounts to fraud, but the aggrieved party had the means of discovering the truth with ordinary diligence (or actually discovered the truth). Under this exception, the contract is not voidable.
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