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Free Consent And Vitiating Factors

Hardman v. Booth (1862) 1 H&C 803

ISSUE:

Whether the contract between the claimant and Edward is void for mistake?

RULE:

Normally, the courts presume that parties who contract face-to-face intend to contract with the person in front of them (inter praesentes), whoever that turns out to be.

This presumption can be rebutted where it is clear that the claimant only intended to contract with a specific person or entity.

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Free Consent And Vitiating Factors

Henry Williams and Others v. James Bayley (1866) L.R. 1 H.L. 200

ISSUE:

Whether a mortgage agreement, executed by a father under the implicit threat of his son's criminal prosecution for forgery, constitutes a contract formed under undue influence and can be held voidable?

RULE:

A contract entered into under the pressure of potential criminal prosecution of a close family member, especially a son, is not the result of free and voluntary consent.

Such agreements are considered to be made under undue influence, as the natural affection and moral obligations a parent feels towards their child can be exploited, leading to decisions that are not entirely voluntary.

For a contract to be valid, it must be the outcome of the free will of the parties involved, without any form of coercion or undue pressure.

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Capacity To Contract

Khan Gul v. Lakha Singh AIR 1928 Lah 609

ISSUE:

Whether a minor, who, by falsely representing himself to be a major, has induced a person to enter into a contract, is estopped from pleading his minority to avoid the contract?

Whether a party is entitled or not, when a minor has entered into a contract by means of a false representation as to his age, refuse to perform the contract and at the same time retain the benefit he may have derived?

RULE:

There is no rule of equity, justice and good conscience which entitles a court to enforce a void contract of a minor against him under cloak of restitution.

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Free Consent And Vitiating Factors

Long v. Lloyd (1958) All E.R. 402 (CA)

ISSUE:

Whether innocent misrepresentation sufficient ground to give rise to right to claim rescission after the contract has been completed?

Whether the plaintiff had accepted the lorry before he alleged to reject it?

RULE:

A party to the contract loses its right to rescind a contract for misrepresentation if it affirms it by continuing to use the goods after discovering the defect.

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Free Consent And Vitiating Factors

Mannu Singh v. Umadat Pande (1890) ILR 12 All 523

ISSUE:

Whether a contract executed in favor of religious or spiritual leader crosses the threshold of undue influence?

RULE:

Fiduciary relationship between the parties put the transaction into judicial scrutiny.

Any relationship that creates significant potential to dominate the will of the plaintiff will assume undue influence and onus to disproof the charge lies on the defendant.

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Free Consent And Vitiating Factors

Raghunath Prasad v. Sarju Prasad (1924) 26 BOMLR 595

ISSUE:

Whether the Appellant can claim his right, under the Section 16 of the Indian Contract Act?

Whether the Respondent was in position to dominate the will of the other party?

RULE:

The burden of proving that the contract was not induced by undue influence is to lie upon the person who was in a position to dominate the will of the other.

If a fact is established, then the unconscionable nature of the bargain and the burden of proof on the issue of undue influence come into operation.

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Free Consent And Vitiating Factors

Ranee Annapurani Nachiar v. Swaminatha Chettiar and ors. (1910) 20MLJ785

ISSUE:

Whether the mortgage by the defendant to the plaintiff of her right to future maintenance is ineffective?

Whether the contract was induced by undue influence?

RULE:

Whenever there is a situation of the parties in an agreement where one of the parties is in position to dominate the will of other, the ‘relation’ between the parties means not only the personal relations but the circumstances in which the contract was entered into.

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Free Consent And Vitiating Factors

R v. Kylsant 1931

ISSUE:

Whether the plaintiff can take action against the defendant for the fraudulent information declared in the company’s prospectus?

Whether the defendant is liable for the fraud?

RULE:

Fraud may be postulated, not only upon misrepresentation, but upon the breach of an absolute duty to disclose all relevant facts.

Also, fiduciary relationships create such a duty of disclosure and where superior knowledge of one party is coupled with ignorance or trustfulness in another.

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Void Agreements

Shell U.K. Ltd. v. Lostock Garage Ltd. [1976] EWCA Civ J0630-1

ISSUE:

Whether the injunction raised by plaintiff to the defendant garage company is reasonable or not, and can they restrain defendants from trade?

Whether the court may enable the defendant to terminate the solus agreement with the plaintiff, and can they proceed to seek supply from other party?

RULE:

If there is any kind of discrimination rendering the commercial operation, the court has to involve in the examination of the business and its commercial relations.
However, this is inevitable when dealing with the doctrine of the restraint of the trade.

Such extremes should not imply a term stopping certain types of discrimination could lead to absurdity. Further, when the degree of discrimination is as such to render the defendants’ commercial operations impracticable, it is prohibited.

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