Consent 13."Consent" defined.

-Two or more persons are said to consent when they agree upon the
same thing in the same sense (Consensus ad idem)

14."Free consent" defined.-Consent is said to be free when it is not caused by- (1) coercion, as defined in
section 15, or (2) undue influence, as defined in section 16, or (3) fraud, as defined in section 17, or (4)
misrepresentation, as defined in section 18, or (5) mistake, subject to the provisions of sections 20, 21
and 22. Consent is said to be so caused when it would not have JMM KLELC 3 Effect of Agreement
without Free Consent 19.Voidability of agreements without free consent.- When consent to an
agreement is caused by n coercion, n fraud or n misrepresentation, n the agreement is a contract
voidable n at the option of the party whose consent was so caused. n A party to a contract whose
consent was caused by fraud or misrepresentation, may, if he thinks fit, insist that n the contract shall be
performed, and that n he shall be put in the position in which he would have been if the representations
made had been true. JMM KLELC 4 Effect of Agreement without Free Consent Exception.-If such 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. Explanation.-A fraud or misrepresentation which did not
cause the consent to a contract of the party on whom such fraud was practised, or to whom such
misrepresentation was made, does not render a contract voidable. JMM KLELC 5 Effect of Agreement
without Free Consent Illustrations (a) A, intending to deceive B, falsely represents that five hundred
maunds of indigo are made annually at A's factory, and thereby induces B to buy the factory. The
contract is voidable at the option of B. (b) A, by a misrepresentation, leads B erroneously to believe that,
five hundred maunds of indigo are made annually at A's factory. B examines the accounts of the factory,
which show that only four hundred maunds of indigo have been made. After this B buys the factory. The
contract is not voidable on account of A's misrepresentation. (c) A fraudulently informs B that A's estate
is free from encumbrance. B thereupon buys the estate. The estate is subject to a mortgage. B may
either avoid the contract, or may insist on its being carried out and the mortgage debt redeemed. (d) B,
having discovered a vein of ore on the estate of A, adopts means to conceal, and does conceal, the
existence of the ore from A. Through A's ignorance B is enabled to buy the estate at an under-value. The
contract is voidable at the option of A. (e) A is entitled to succeed to an estate at the death of B; B dies:
C, having received intelligence of B's death, prevents the intelligence reaching A and thus induces A to
sell him his interest in the estate. The sale is voidable at the option of A. JMM KLELC 6 JMM KLELC 7
Kinds of Contract S. 2(g) An agreement not enforceable by law is said to be void: S. 2(h) An agreement
enforceable by law is a contract: S. 2(i) An agreement which is enforceable by law at the option of one or
more of the parties thereto, but not at the option of the other or others, is a voidable contract: S. 2(j) A
contract which ceases to be enforceable by law becomes void when it ceases to be enforceable. JMM
KLELC 8 Coercion 15. "Coercion" defined.-"Coercion" is – Ø the committing, or threatening to commit, Ø
any act forbidden by the Indian Penal Code, or Ø the unlawful detaining, or threatening to detain, any
property, to the prejudice of any person whatever, Ø with the intention of causing any person to enter
into an agreement. Explanation.-It is immaterial whether the IPC is or is not in force in the place where
the coercion is employed. Illustration A, on board an English ship on the high seas, causes B to enter into
an agreement by an act amounting to criminal intimidation under the IPC. A afterwards sues B for
breach of contract at Calcutta. A has employed coercion, although his act is not an offence by the law of
England, and although section 506 of the IPC was not in force at the time when or place where the act
was done JMM KLELC 9 Coercion - Analysis Chikham Amiraju v. Chikham Seshamma A Hindu induces his
sons and wife to execute a deed of release in favour of his brother under the threat of suicide. Held:
voidable Astley v. Reynolds Pt. pledged property with dt. for $ 20. on redeeming the same dt. claimed
additional interest of $ 10. Pt. paid & redeemed. But later sued for $ 10. Held: Pt. will succeed. JMM
KLELC 10 S. 16 Undue Influence (1) A contract is said to be induced by undue influence where the
relations subsisting between the parties are such that n one of the parties is in a position to dominate
the will of the other and n He uses that position to obtain an unfair advantage over the other. (2) In
particular and without prejudice to the generality of the foregoing principle, a person is deemed to be in
a position to dominate the will of another- (a) where he holds a real or apparent authority over the
other or where he stands in a fiduciary relation to the other; or (b) where he makes a contract with a
person whose mental capacity is temporarily or permanently affected by reason of age, illness, or
mental or bodily distress. (3) Where a person who is in a position to dominate the will of another, Ø
enters into a contract with him, and Ø the transaction appears, on the face of it or on the evidence
adduced, Ø to be unconscionable, Ø the burden of proving that such contract was not induced by undue
influence shall lie upon the person in a position to dominate the will of the other JMM KLELC 11 JMM
KLELC 12 Relation between the Parties Undue Influence one of the parties is in a position to dominate
the will of the other He uses that position to obtain an unfair advantage over the other. JMM KLELC 13
Position to dominate the will of another - Presumption holding a real or apparent authority over the
other or where he stands in a fiduciary relation to the other contract with a person whose mental
capacity is temporarily or permanently affected by reason of age, illness, or mental or bodily distress
JMM KLELC 14 S. 16 Undue Influence – Illustrations (a) A having advanced money to his son, B, during his
minority, upon B's coming of age obtains, by misuse of parental influence, a bond from B for a greater
amount than the sum due in respect of the advance. A employs undue influence. (b) A, a man enfeebled
by disease or age, is induced, by B's influence over him as his medical attendant, to agree to pay B an
unreasonable sum for his professional services. B employs undue influence. (c) A, being in debt to B, the
money-lender of his village, contracts a fresh loan on terms which appear to be unconscionable. It lies
on B to prove that the contract was not induced by undue influence. (d) A applies to a banker for a loan
at a time when there is stringency in the money market. The banker declines to make the loan except at
an unusually high rate of interest. A accepts the loan on these terms. This is a transaction in the ordinary
course of business, and the contract is not induced by undue influence. JMM KLELC 15 JMM KLELC 16
Undue Influence – Analysis “Position to dominate the will of the other” n Sometimes the relation
between the parties is such that one of them is able to will of the other. The person occupying the
superior position may prevail upon the other obtain his consent to an agreement. But for such influence
he would not have consented. n Eg., spiritual adviser inducing his devotee to gift over the property for
securing moksha n It is a kind of fraud, mastery is obtained over the mind of the victim, calculated to
prevent expression of the free mind of the person JMM KLELC 17 Relations involving domination –
Presumption n Every case where there is a trust and confidence between parties or the parties are not
on equal footing – influence acquired and abused – confidence reposed and betrayed. n Presumption is
rebuttable (without prejudice to the foregoing provisions) “Real or apparent authority” A person in
authority may exert influence on other over whom he has authority. Eg. IT Officer, Police officer,
Magistrate, etc. “fiduciary relation” Relation involving trust and confidence, innumerable instances,
doctor-patient, solicitor-client, gurudevotee, etc., JMM KLELC 18 Moody v. Cox A solicitor sold his
property to his client, who later alleges that property was over valued Held: voidable, party having
influence over the other shall not make contract with him, if he does so he shall satisfy the court that it
is advantageous to that other party. “Mental Distress” When a person’s mental capacity is temporarily
or permanently affected he is said to be in distress. It may be due to old age, mental or physical illness or
any other cause. He may give consent for what is unfavorable to him. Eg. A Hindu wife agreeing for a
loan @ 100% interest for suing her husband for maintenance. Held: voidable, BOP is on the pt. to show
that the other person was in a dominating position and he used it for the disadvantage of the other
JMM KLELC 19 Nature of Presumption u/s.15(2) In some cases on showing that one was in a position to
dominate the will of the other his use of the same to the disadvantage of the other is presumed. But dt.
may show that the pt. consented freely. Eg. Married women of full age guaranteeing the repayment of
loan obtained by her mother Held: though she was under the influence of her mother, facts and
circumstances of the case shall guide and not general presumption. A parda lady of 70 years with 3
daughters gifted the property to his tenant who was in possession of it. Held: by the possession of the
land he may have dominated the will of the lady, it is for him to show her free consent. JMM KLELC 20
Instances of presumption 1. Unconscionable bargains Where one of the parties to the contract is in a
position to dominate the will of the other and the contract appears to be unconscionable i.e., unfair, law
presumes that consent must have been obtained by undue influence. Burden then shifts on the dt. to
prove that no unfair advantage was obtained over the pt. Wajid khan v. Raja Ewaz Ali khan An old
illiterate woman incapable of any business confers on her managing agent with out any consideration a
valuable pecuniary benefit. Held: voidable Eg. Money lending, suits in courts, poverty and distress, youth
and spendthrift, Between equally placed parties no unconscionableness JMM KLELC 21 2.
Unconscionable gifts Eg., a person suffering from number of ailments confined to nursing home for long
executes gift deed of whole of his property in favor of one son to the exclusion of other sons n An old,
illiterate malay lady gifted all her rent-producing property to her nephew who assisted her always. Held:
unconscionable 3. Inequality of bargaining power Presumption may also arise on the fact of inequality of
bargaining power between parties causing duress on the other. Lyods Bank v. Bundy – a contractor
obtained loan from bank. Not paid in time – bank presses for payment/security – contractor said his
father might mortgage his only residential house – which was done by father by banker taking signature
on the readymade papers. Contractor defaulted. Bank moved against father Held: bank exploited the
vulnerability of his father caused by his desire to help his son. JMM KLELC 22 4. Exploitation of the needy
When the consent of the party is obtained as a result of exploitation undue influence is presumed A S
Music Publishing Co. v. Macaulay Young song writer contracted to write songs for 5 yrs and to renew the
same for another 5 yrs at he option of the music co. co. can terminate at anytime by a word of mouth.
Boy wanted liberation Held: voidable 5. Contracts with paradanashin woman A contract with
pardanashin woman has been presumed to have been induced by undue influence. She can avoid
contract unless other party shows that it was her intelligent and voluntary act. Pardanashin woman is
who is totally secluded from social intercourse. JMM KLELC 23 Misrepresentation S.
18."Misrepresentation" defined.- "Misrepresentation" means and includes- (1) the positive assertion, in
a manner not warranted by the information of the person making it, of that which is not true, though he
believes it to be true (2) any breach, of duty which, without an intent to deceive, gains an advantage to
the person committing it, or any one claiming under him, by misleading another to his prejudice or to
the prejudice of any one claiming under him; (3) causing, however innocently, a party to an agreement
to make a mistake as to the substance of the thing which is the subject of the agreement. JMM KLELC 24
Misrepresentation – Analysis 1. Positive assertion of unwarranted statement of fact n When a person
positively asserts that a fact is true when his information does not warrant it to be so, though he
believes it to be true, he makes misrepresentation. n Eg. Capacity of the ship – stated to be not more
than 2800 tonnage – without information but honest belief – actual registered 3000 tonnage – n charter
party was allowed to avoid the contract n Purchase of land for the construction of a complex – seller
represents there is no difficulty in such use of the land – municipal authority refuses permission for such
use of land unless sewage cost of $3000 is paid n buyer was allowed to avoid the sale. n When
misrepresentation relates to a term of the contract buyer not only avoids the contract he may even
claim damages for breach. JMM KLELC 25 2. Breach of duty Ø Any breach of duty which brings an
advantage to the person committing it by misleading the other to his prejudice is a misrepresentation.
[constructive fraud] Ø Eg. Omitting to read relevant terms from the deed – though dt. is not under duty
to do so, when he does so he should do it without concealing – pt. can avoid the contract Ø Eg. A female
patient was told her sterilisation would be irreversible – not told that there’s minute risk of failure and
pregnancy – she conceived, gave birth – claimed damages for breach. Ø HELD: Representation that the
operation was irreversible did not amount to express statement that the operation was bound to
achieve its acknowledged object. The representation merely meant that the operative system cannot be
reversed. JMM KLELC 26 3. Inducing mistake about subject matter n Causing, however innocently a party
to an agreement, to make a mistake as to the substance of the thing which is the subject of the
agreement n Suppression of vital facts n Suppression or concealment of vital facts amounts either to
breach of duty or leading other party to make mistake n R v. Kylsant Prospectus of a co. stated the
dividends are paid regularly crating an impression that it is making profits - in fact, co. was under for last
several years – dividends were paid out of war-time accumulated profits n suppression of this fact was
misrepresentation. JMM KLELC 27 Material facts n Misrepresentation shall be of material facts – mere
commendatory expression of businessmen about their goods or mere expression of opinion is not
misrepresentation n Sale of land - general statement that land is fertile and improvable – in fact, parts of
which was abandoned as useless - substantial portion was fertile – cannot avoid the contract. n Bisset v.
Wilkinson – certain lands were sold – seller was aware that the land was required for sheep farming.
Therefore, expressed an opinion that the land had a carrying capacity of 2000 sheep – land turned out to
be unsuitable for sheep farming – buyer opted to avoid the contract. JMM KLELC 28 Bisset v. Wilkinson
Contd.. n Held: agreement was not voidable n There should be representation of specific fact, which
may be inherent in a statement of opinion. It depends on material facts and knowledge of the parties n
Both parties knew that vendor had not nor any other person had carried sheep farming on the land n In
the circumstances, the buyer was justified in regarding anything said by the vendor as to the carrying
capacity as being anything more than an expression of opinion on the subject. JMM KLELC 29 Change of
circumstances n After the negotiation and before conclusion of contract, if any change occurs relating to
stated facts, it shall be informed to the other party, otherwise amounts to misrepresentation. n Eg. Sale
of medical practice – dt said his practice had brought him $ 2000 per annum in the last 3 yrs. – he had a
specified no. of patients on his panel – negotiations resulted in a contract – in 5 month – in the mean
time he became ill and could not practice as a result lost business – pt learnt about it only after the sale
– pt. could avoid the contract. JMM KLELC 30 Inducement n Misrepresentation must be the cause of
consent n But for the misrepresentation consent would not have been given n S. 19 - Explanation.-A
fraud or misrepresentation which did not cause the consent to a contract of the party on whom such
fraud was practised, or to whom such misrepresentation was made, does not render a contract voidable
n No misrepresentation if the other party has the means of discovering truth with ordinary diligence n S.
19 Exception.-If such consent was caused by misrepresentation or by silence, fraudulent u/s. 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. JMM KLELC 31 S. 17 Fraud “Fraud” means and includes any
of the following acts committed by a party to a contract, or with his connivance, or by his agent, with
intent to deceive another party thereto or his agent, or to induce him, to enter into the contract- (1) the
suggestion, as a fact, of that which is not true by one who does not believe it to be true: (2) the active
concealment of a fact by one having knowledge or belief of the fact: (3) a promise made without any
intention of performing it : (4) any other act fitted to deceive : (5) any such act or omission as the law
specially declares to be fraudulent. JMM KLELC 32 n Explanation :-- Mere silence as to facts likely to
affect the willingness of a person to enter into a contract is not fraud, unless the circumstances of the
case are such that, regard being had to them, it is the duty of the person keeping silence to speak, or
unless his silence is, in itself, equivalent to speech. JMM KLELC 33 Illustrations Ø A sells, by auction, to B,
a horse which A knows to be unsound. A says nothing to B about the horse's unsoundness. This is not
fraud in A. Ø B is A's daughter and has just come of age. Here, the relation between the parties would
make it A's duty to tell B if the horse is unsound. Ø B says to A-"If you do not deny it, I shall assume that
the horse is sound." A says nothing. Here, A's silence is equivalent to speech. Ø A and B, being traders,
enter upon a contract. A has private information of a change in prices which would affect B's willingness
to proceed with the contract. A is not bound to inform B. JMM KLELC 34 Essentials I. Assertion of fact
without belief in its truthfulness Derry v. Peek Prospectus of a co. represented that it had been
authorized by a special Act of parliament to run trams by steam or mechanical power – it was in fact
subject to approval of board of trade, no mention was made of this – board refused consent and co.
wound up – pt. purchaser of shares sued the directors for fraud. JMM KLELC 35 Derry v. Peek Contd..
HELD: No fraud, Directors honestly believed that once parliament had authorised the use of steam, the
consent of the board was practically concluded. It therefore follows that the person making false
representation is not guilty of fraud if he honestly believes in its truthfulness. False representation – n
Made knowingly or n Without belief in truth or n Recklessly careless about its truthfulness amounts to
fraud JMM KLELC 36 II. Active Concealment ØActive concealment and silence ØActive concealment of
material fact is fraud ØEg. A husband persuades his wife to sign few documents telling her that he would
mortgage her two lands while it was mortgage of 4 lands in reality. ØNon-disclosure of sudden change in
price by a trader. JMM KLELC 37 Silence as Fraud (Is Silence Fraud?) Silence as Fraud Duty to Speak
Deceptive Silence Change of Circumstances Half truth JMM KLELC 38 A. Duty to Speak Ø Silence
amounts to fraud when person keeping silence is under a duty to speak Duty to speak Trust and
confidence When one of the party does not have means of discovering truth and depends on other
party JMM KLELC 39 Deceptive Silence n A person keeping silent knowing that his silence will be
deceptive, is no less guilty of fraud n Eg., Buyer knowing value of the property, when keeps information
without disclosing to the seller. He may avoid contract Change of Circumstances n True representation
made at the time of negotiation if affected by change of circumstances before conclusion of contract –
non-disclosure amounts fraud n Eg., Sale of medical practice JMM KLELC 40 Half truths Ø Even a person
without duty to speak may commit fraud, if voluntarily discloses some thing and then he stops half-the-
way Ø Half-truth is no better than false down-right hood Ø One who can keep silent, if speaks shall
speak whole truth Ø Eg. Pt. purchased a plot of land. It was stated that the land was subject to a right of
the Borough to open to 2 streets. In fact, it was subject to open to 3 streets. Ø Held: fraud JMM KLELC
41 III. Promise without intention to perform Ø Situation to be assessed from the facts of the case. Ø Eg.
Purchase of goods without intending to pay for it IV. Any other act fitted to deceive – intentional
cheating – abundant caution V. Any act or omission specifically declared fraudulent Eg. TP Act –
Fraudulent transfer of property Insolvency law – fraudulent preference, etc JMM KLELC 42 Fraud and
Misrepresentation Similarities Agreement becomes a contract voidable False Representation
Discovering truth by ordinary diligence - Good defense JMM KLELC 43 Differences FRAUD n Intentional
wrong n Contract becomes voidable and cause of action in tort for damages MISREPRESENTATION n
May be quite innocent n Makes the contract voidable and liability for compensation JMM KLELC 44
Effects of fraud or misrepresentation Ø Right to rescind the contract Ø Agreement becomes a contract
voidable at the option of the party whose consent was not free Ø He may insist that the contract be
performed Ø He may insist that he should be in the same position in which he would have been if the
misrepresentation made had been true. JMM KLELC 45 Right to rescind – Exceptions I. Affirmation –
party becomes aware of his right to rescind and affirms it – express or implied n Eg. use of goods
obtained under contract n Long v. Llyod – dt. falsely convinced the pt. that his lorry was in excellent
condition – on the very first journey serious defects noticed - pt. accepted dt.’ s offer to bear half the
cost of repairs – the lorry completely broken down on the next journey n HELD: on the first breakdown
pt came to know that representation was false. Instead of rescinding he has accepted to receive half the
repair charges and sent the lorry on second trip. This amounted to final acceptance for better of for
worse and conclusively extinguished right of rescission. JMM KLELC 46 Right to rescind – Exceptions II.
Lapse of time – “reasonable time” Ø Eg. Allotment of shares – misleading prospectus – 6 months after
allotment sues for setting aside the contract Ø Unexplained delay extinguished the right III. Acquiring of
rights by third parties When third party acting in good faith acquires rights in the subject matter of the
voidable contract. Ø Eg. Resale of goods by a buyer obtaining them under voidable contract. JMM KLELC
47 Effects of Rescission n I. Restitution - S. 64 n Eg. Person avoiding contract of loan obtained under
undue influence shall return the amount received with reasonable interest. n II. Damages S. 75 n
Intentional failure of a singer contracted to sing at the theatre for two months. JMM KLELC 48 Mistake
Ss. 20 - 22 n When the consent of the parties is caused by mistake, it is not free consent. n One, or both
parties may be under some misunderstanding or misapprehension of some fact relating to the
agreement. Such contracts are said to have been caused by mistake. n Mistake may operate upon a
contract in two ways: 1. Mistake in the mind of the parties is such that there is no genuine agreement at
all - no consensus ad idem. i.e. the meeting of two minds. 2. There may be a genuine agreement, but
there may be mistake as to a matter of fact relating to that agreement. JMM KLELC 49 n In Raffles Vs.
Wichelhaus (1864) Buyer and seller entered into an agreement - seller was to supply a cargo of cotton to
arrive “ex peerless from Bombay” . - Two ships of the same name. i.e., Peerless - both were to sail from
Bombay, one in October and the other in December. - buyer had in mind Peerless sailing in October,
seller thought of the ship sailing in December - seller dispatched cotton by December ship but the buyer
refused to accept the same - offer and acceptance did not coincide and there was no contract. It was
HELD that the buyer was entitled to refuse to take delivery. JMM KLELC 50 Mistake as to a matter of fact
essential to the agreement S. 20. Agreement void where both parties are under mistake as to matter of
factWhere both the parties to an agreement are under a mistake as to a matter of fact essential to the
agreement, the agreement is void. Essentials 1. Both the parties to the contract should be under a
mistake and 2. Mistake should be regarding a matter of fact. 3. The fact regarding which the mistake is
made should be essential to the agreement. JMM KLELC 51 Illustrations ØA agrees to sell to B a specific
cargo of goods supposed to be on its way from England to Bombay. It turns out that, before the day of
the bargain, the ship conveying the cargo had been cast away, and the goods lost. Neither party was
aware of these facts. The agreement is void. Øb) A agrees to buy from B a certain horse. It turns out that
the horse was dead at the time of the bargain, though neither party was aware of the fact. Agreement is
void ØA being entitled to an estate for the life of B, agrees to sell it to C . B was dead at the time of the
agreement, but both the parties were ignorant of the fact. The agreement is void. JMM KLELC 52
Mistake of law n 21. Effect of mistake as to law.--- A contract is not voidable because it was caused by a
mistake as to any law in force in India: but a mistake as to law not in force in India has the same effect as
a mistake of fact. Illustration n A and B make a contract grounded on the erroneous belief that a
particular debt is barred by the Indian Law of Limitation: the contract is not voidable. n Every one is
supposed to know the law of the land. Ignorance of law is no excuse. If a person wants to avoid the
contract on the ground that there was a mistaken impression in his mind as to the existence of some law
while he entered into the contract, he will get no relief. JMM KLELC 53 n S. 22. Contract caused by
mistake of one party as to matter of fact.--- A contract is not voidable merely because it was caused by
one of the parties to it being under a mistake as to matter of fact n In Ayekam Angahal Singh Vs. The
Union of India, auction for the sale of fishery rights – pt. was highest bidder for Rs. 40,000 - fishery right
had been auctioned for 3 years and rental in fact was Rs. 40,000 per year – pt. sought to avoid contract
on the ground that he was working under a mistake and he thought that he had made a bid of Rs. 40000
being rent for all the three years. HELD: since the mistake was unilateral, contract was not affected
thereby and it could not be avoided JMM KLELC 54 MISTAKE Identity of parties Nature of promise
Identity of subject matter JMM KLELC 55 I. MISTAKE AS TO INDENTITY OF PARTIES Ø Assumption of false
identity – when one represents himself falsely than what he really is. Ø Eg. Jaggannath v. Secty. of State
‘S’ the brother of ‘P’ introduces himself to be ‘P’ and induced a govt. agent to contract with him. HELD:
there was no valid agreement and no contract. Govt. intended to contract only with ‘P’ and not with ‘S’,
who knew this and deceived the govt. There is no real consent because an acceptance meant for one
cannot be accepted by another. JMM KLELC 56 Mistake - Identity of Parties Caused by business takeover
Identity caused by fraud Fraud leading to mistake of identity Fraud not leading to mistake of identity
Identity of party as vital importance JMM KLELC 57 Mistake caused by business takeover Ø Boulton v.
Jones – Pt. took over the business of Mr. “B” Dt. who was dealing with ‘B’ in the past sent him an order
for certain goods. The order was received by the pt. who sent the goods to ‘B’. Dt. Came to know of this
only when he received invoice for the goods and by that time he had consumed the goods. Dt. had a set-
off against Mr. ‘B’ , therefore refused to pay. Ø HELD: Pollock J – “ now, the rule of law is clear, that if
you propose to make a contract with ‘A’ , then ‘B’ cannot substitute himself for ‘ A ’ without your
consent and to your disadvantage, securing to himself all the benefits of the contract” JMM KLELC 58
Boulton v. Jones Contd… Ø Bramwell J. – “When any one makes a contract in which the personality, so
to speak, of the the particular party contracted with is important, for any reason, whether it is to write a
book, or paint a picture or to do any work of personal skill or whether because there is a set-off due
from that party, no one else is at liberty to step in, and maintain that he is a party contracted with “
JMM KLELC 59 Mistake of identity caused by fraud n Hardman v. Booth – pt intending to deal with
“Thomas Gandell & Sons” went to their office and took orders from a person who represented himself
to be a partner – he told the pt that the goods should be sent in the name of “Edward Gandell & sons. ”
he received the goods and sold them to the dt., a bonafide buyer. Pt. sued dt. to recover goods. n HELD:
POLLOCK J. – “there are some cases in which it is very clear that there is no contract at all; and the
present case seems to be one of those cases. It was argued that the contract was made personally with
the particular individual who made the communication: it is very clear that the words were uttered by
and to him, but what they imported was a contract with “Gandell & co”. The facts being that he were
not a member of the firm and had no authority to act as their agent. Gandsell & Co. was therefore not
the buyer and consequently at no time were there two consenting minds drawn together to same
agreement. JMM KLELC 60 Fraud leading to mistake of identity n Ingram v. Little – 3 ladies joint owners
of a car, advertised for sale – person called at the house offered to pay an acceptable price – he pulled
out a cheque they rejected it – he then persuaded them to believe that he is one Mr. Hachinson, a
leading businessman, quoted an address and telephone no. – on verification of it from the directory
they gave the car for cheque – he resold and absconded – Cheque proved worthless – 3 ladies sued dt. a
bonafide buyer, for recovery of the car. JMM KLELC 61 Ingram v. Little Contd… n HELD: They can recover
the car “3 ladies did not intend to contract with a man presented at their house but with Mr. Hachinson
– the offer was made solely to and was capable of being accepted only by the genuine Mr. Hachinson –
so far ass the rogue was concerned there was no offer made to him and there was no contract with him.
His right to the car was no more than that of a thief or a finder hence he could not convey good title to
the dt. buyer. JMM KLELC 62 Fraud not leading to mistake of identity n Lewis v. Avery n Pt had a car to
sell – a rogue introduced himself as Mr. Richard Green, a famous film actor. – liked the car and offered a
cheque – pt rejected and demanded proof of identity – the rogue produced a special pass of admission
to the Film Studio, which showed his photograph and official stamp – convinced of this pt allowed the
car to be taken away for a cheque – rogue sold it to innocent buyer immediately – cheque came back
worthless – pt sued the dt, an innocent buyer to recover his car n HLED: the car was delivered under a
contract voidable by reason of the fraud and the contract having not been avoided before the car was
passed into the hands of innocent buyer, he acquired a good title JMM KLELC 63 Identity of party as vital
importance n Said v. Butt n Pt knew that on a/c of his adverse criticism of some members of a theatre,
he would not be allowed to be present at the first performance of a play at the theatre – he bought
ticket through another and sought admission in the theater which was rejected – pt sued him for breach
of contract n HELD: No contract “There was no contract between pt and the theatre. Non-disclosure of
the fact that the ticket was bought for the pt prevented the sale of the ticket from constituting a
contract, identity of the pt being in the circumstances a material fact in the formation of the contract.”
JMM KLELC 64 Mistake as to Sub -matter Non - existent Sub -matter Mistake as to Title/rights Different
Sub -matters in mind Mistake as to substance of sub -matter Mistake as to Quality of Sub -matter
Mistake as to Common misappreh ension JMM KLELC 65 II. Mistake as to Sub-matter 1. Non-existent
Sub-matter n Mistake as to sub-matter makes the agreement void n Eg. Sale horse which was dead on
the dt of bargain n Sale of goods on voyage which are destroyed in a ship wreck (Couturier v. Hastile)
JMM KLELC 66 2. Mistake as to title or rights n Unknown to the parties, if the seller wants to sell what is
already belonged to buyer – transfer of ownership is impossible n Cooper v. Phibbs An uncle told his
nephew, not intending to misrepresent but being in fact in error, that he was entitled to a fishery –
nephew after uncle’s death acting in belief of the truth of what the uncle had told him, entered into an
agreement to rent the fishery from uncle’s daughter, where as it actually belonged to nephew himself.
HELD: Mistake was such as not only to make the agreement void, but also liable to be set aside on such
terms as the court thought fit. JMM KLELC 67 2. Mistake as to title or rights Contd… n Eg. Seller
purported to sell all his rights in the land including right to mine minerals – buyer wanted land only for
mining minerals in the land – but seller did not have a right to mine minerals. n Agreement is void 3.
Different sub-matters in mind n Where parties due to reasonable mistake of fact, have different sub-
matters in mind, agreement is void for lack of true consent. Eg. Raffles v. Wichellaus – case of two ships
named “peerrless” JMM KLELC 68 4. Mistake as to substance of sub-matter n Mistake as to the existence
of some fact/s forming an essential and integral part of the sub-matter leads to void agreement n Seikh
Bros. ltd., v. Ochener pt. a lessor of forest in Kenya granted a license to the dt. to cut, process and
manufacture all sisal growing in the forest. Dt in turn agreed to manufacture and deliver to the Pt 50
tons of sisal fiber per month. But it tuned out that the leaf potential of the sisal area was not sufficient
to permit the manufacture of the stipulated quantity and dt was sued for the breach HELD: agreement
void – basis of the contract was sisal area should be capable of producing pm & mistake was as to a
matter of fact essential to the agreement Eg. Agreement to compromise a suit already decreed. JMM
KLELC 69 5. Mistake as to Quality of Sub-matter n A mistake as to quality of sub-matter as distinguished
from substance of the sub-matter may not render the agreement void n Smith v. Hughes Dt wanted old
Oats for his horse – pt showed sample – dt kept sample for 24 hrs and placed order for Oats – after they
are delivered he found them new and therefore rejected – on the ground that he was mistaken about
their quality HELD: Valid contract – two minds were not at ad idem as to the quality of Oats but they
certainly were at ad idem as to the purchase of them. JMM KLELC 70 6. Mistake as to Common
misapprehension n Magee v. Pennine Insurance co. Pt bought a car for his 18 yr old son, who had a
provisional DL – proposal form was filled by manager of firm where car was bought, who happened to
state that pt had a provisional DL in fact he had none – accident took place – dt claimed $ 600 –
compromised for $ 385 – co. came to know of misstatement and declined to pay HELD: agreement of
compromise was entered into under the common and fundamental mistake that the original policy was
valid & binding, when in fact it was voidable for the misstatement. JMM KLELC 71 III. Mistake as to
nature of Promise n Mistake as to the character of the deed – void n Eg. Gift deed – Power of attorney n
Distinction between “fraudulent misrepresentation as to the character of the document and its
contents.” - former is void later is voidable n Eg. Manager of a old man to look after lands – gift deed in
the place of deed of lease n Eg. Old lady seeking help of her brother to avoid trespass to her lands –
application to collector - thumb impression on blank papers – later regd as sale deed n Documents
mistakenly signed are non est factum – to protect the illiterate or blind – mind and hand should go
together to make a deed valid