Indian Contract Act,1872
Act No : 9
Section : Voidability of agreements without free consent
19.Voidability of agreements without free consent.-When consent to anagreement is caused by coercion,1* fraud or misrepresentation, theagreement is a contract voidable at the option of the party whoseconsent was so caused. A party to a contract whose consent was caused by fraud or mis-representation, may, if he thinks fit, insist that the contract shallbe performed, and that he shall be put in the position in which hewould have been if the representations made had been true. Exception.-If such consent was caused by misrepresentation or bysilence, fraudulent within the meaning of section 17, the contract,nevertheless, is not voidable, if the party whose consent was socaused had the means of discovering the truth with ordinary diligence. Explanation.-A fraud or misrepresentation which did not cause theconsent to a contract of the party on whom such fraud was practised,or to whom such misrepresentation was made, does not render a contractvoidable. Illustrations (a) A, intending to deceive B, falsely represents that fivehundred maunds of indigo are made annually at A's factory, and therebyinduces B to buy the factory. The contract is voidable at the optionof B. (b) A, by a misrepresentation, leads B erroneously to believethat, five hundred maunds of indigo are made annually at A's factory.B examines the accounts of the factory, which show that only fourhundred maunds of indigo have been made. After this B buys thefactory. The contract is not voidable on account of A'smisrepresentation. (c) A fraudulently informs B that A's estate is free fromincumbrance. B thereupon buys the estate. The estate is subject to amortgage. B may either avoid the contract, or may insist on its beingcarried 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 orefrom A. Through A's ignorance B is enabled to buy the estate at anunder-value. The contract is voidable at the option of A. (e) A is entitled to succeed to an estate at the death of B ; Bdies: C, having received intelligence of B's death, prevents theintelligence reaching Al and thus induces A to sell him his interestin the estate. The sale is voidable at the option of A.2*[19A. Power to set aside contract induced by undue influence.- Whenconsent to an agreement is caused by undue influence, the agreement isa contract voidable at the option of the party whose consent was socaused. Any such contract may be set aside either absolutely or, if theparty who was entitled to avoid it has received any benefitthereunder, upon such terms and conditions as to the Court may seemjust.--------------------------------------------------------------------- 1 The words " undue influence " were rep. by Act 6 of 1899, s. 3. 2 Ins., ibid.---------------------------------------------------------------------27 Illustrations (a) A's son has forged B's name to a promissory note. B, underthreat of prosecuting A's son, obtains a bond from A for the amount ofthe forged note. If B sues on this bond, the Court may set the bondaside. (b) A, a money-lender, advances Rs. 100 to B, an agriculturist,and, by undue influence, induces B to execute a bond for Rs. 200 withinterest at 6 per cent. per month. The Court may set the bond aside,ordering B to repay the Rs. 100 with such interest as may seem just.]
Read All Comments
