Legal Reasoning: Practice Paper on Free Consent

Q1. Principle: An agreement without free consent can be enforced only at the option of the party whose consent was not free.​​ 

Facts: A obtains the consent of B to enter into an agreement by putting a gun on the head of B‘s girl friend.​​ 

(A) B can enforce the agreement.​​ 

(B) B cannot enforce the agreement.​​ 

(C) A can enforce the agreement.​​ 

(D) Neither A nor B can enforce the agreement. ​​      [CLAT 2019] ​​ 

 

Q2. Principle: Where one of the parties to a contract was in position to dominate the decision of the other party, the contract is enforceable only at the option of the party who was in a position to dominate decision of the other party.​​ 

Facts: A doctor asked his patient to make a payment of Rs. 10,00,000/- (Ten Lac Only) for treatment of his fever. The patient paid an amount of Rs. 5,00,000/- (Five Lac Only) and promised to pay the remaining amount after the treatment. After treatment the patient recovered from fever. The doctor demanded the remaining amount from the patient. The patient refused to pay.​​ 

(A) The contract is enforceable against the doctor.​​ 

(B) The contract is enforceable against the patient.​​ 

(C) The contract is not enforceable.​​ 

(D) The contract is not enforceable against the patient.​​     [CLAT 2019]​​ 

 

Q3. Principle: It is a case of fraud where a party to a contract knows or believes a fact to be true, but conceals it actively from the other party with a view to induce that person to enter into the contract.

Facts: While taking a life insurance policy, in reply to questions by the insurance company during the inquiry into his proposal, Zameer deliberately concealed the fact of his medical treatment for a serious ailment, which he had undergone only a few weeks ago.

(A) The act of Zameer did not amount to fraud, as disclosing the fact would have resulted in exposure of his privacy.

(B) The act of Zameer amounted to innocent misrepresentation.​​ 

(C) The act of Zameer did not amount to any misrepresentation.

(D) The concealment of fact by Zameer amounted to fraud.​​     [CLAT 2017]​​ 

 

Q4. Principle: Mere silence as to facts likely to affect the decision of a person to enter into a contract is not fraud.

Facts: 'A' sells to 'B' (A's daughter who is minor) a horse which 'A' knows to be unsound. 'A' says nothing to 'B' about the unsoundness of the horse.

(A) 'B' can take plea of fraud because she is minor.

(B) There cannot be a contract between a father and daughter.

(C) 'A' has not committed fraud.

(D) 'A' has committed fraud. ​​         [CLAT 2016]

 

Q5. Principle: When consent to an agreement is caused by coercion, undue influence, fraud or misrepresentation, the agreement is a contract voidable (rescindable or terminable) at the option of the party whose consent was so caused. ​​ 

Facts: 'X' threatens to gun down 'Y', if he ('Y') does not sell his property worth Rs. 20,00,000/- for Rs 1,00,000/- only. As a consequence, 'Y' agrees to sell it as demanded by 'X'.​​ 

Which of the following derivations is CORRECT?​​ 

(A) There is a contract between 'X' and 'Y'.

(B) There is an agreement between 'X' and 'Y' which can be enforced by the court of law.​​ 

(C) There is an agreement between 'X', and 'Y' which cannot be enforced by the court of law. ​​ 

(D) There is a contract between 'X' and 'Y' which is voidable at the option of 'Y  ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​​​             [CLAT 2014]​​ 

 

Q6. Principle: Knowingly making a false statement to a person with an intention to deceive him into entering into a contract constitutes fraud. Making a false statement while believing it to be true constitutes misrepresentation.​​ 

Facts: The directors of a company issued prospectus stating that they had authority to run tramways with steam. The directors honestly believed that the board of trade would grant sanction to the company for the same. The board of trade later refused to grant sanction to the company.​​ 

(A) The directors are liable for fraud.​​ 

(B) The directors are liable for misrepresentation.​​ 

(C) Facts are not sufficient

(D) None of the above.​​ 

 

Q7. Principle: Whosoever commits any act forbidden by the Indian Penal code with a view to obtain the consent of any person to enter into an agreement, he cannot get the agreement enforced by law but the person whose consent has been so obtained may get the agreement enforced by law. The Indian Penal code defines various offences and prescribes punishments thereof.

Facts: A obtains the consent of B to enter into an agreement by an act amounting to criminal intimidation under the Indian Penal Code. A brings a case against B for performance of agreement.
(A) A will succeed in the case

(B) A may succeed in the case

(C) B will succeed in the case

(D) B will not succeed​​ in the case​​        ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​​​ ​​ [CLAT 2013]  ​​ ​​​​ 

 

Q8. Principle: Mere silence as to the facts likely to affect the willingness of a person to enter into a contract is not a fraud, unless the circumstances of the case are such that, on close examination it is found to be the duty of the person keeping silent to speak, or unless his silence is, in itself, equivalent to speech.

Facts: X sells by auction to Y, a horse which X knows to be of unsound state of mind. X says nothing to Y about the horse’s unsound state of mind.

Give the correct answer-

(A) X can be held liable for fraud.

(B) X can be held liable for misrepresentation.

(C) X cannot be held liable because he did not say anything positive about the mental state of the horse.
(D) X cannot be held liable because it is the buyer who must​​ be aware of the thing.  ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​​​             ​​ [CLAT 2012]

 

Q9. Principle: The act of using threats to force another person to enter into a contract is called coercion. In order to prove coercion, the existence of the use of threat, in any form and manner, is necessary. If coercion is proved, the person who has been so threatened can refuse to abide by the contract.

Facts: Aadil is the son of multi millionaire business person, Chulbul who owns Maakhan Pharmaceuticals. Baalu is the son of a bank employee, Dhanraj. One day, Aadil is abducted from his office by Baalu. Chulbul receives a phone call from Dhanraj telling him that if he does not make Baalu the CEO of Maakhan Pharmaceuticals, Aadil will be killed. Chulbul reluctantly agrees to make Baalu the CEO. Subsequently Chulbul and Baalu sign an employment contract. However as soon as Aadil is released and safely returns home, Chulbul tells Baala that he shall not enforce the employment contract.​​ 

Chulbul is:

(A) Justified in refusing to enforce the employment contract as Chulbul was coerced by Dhanraj.
(B) Justified in refusing to enforce the employment contract as Baalu was complicit in the coercive act.​​ 

(C) Not justified in refusing to enforce the employment contract as Baalu was an innocent person and has not coerced Chulbul.

(D) Both (A) and (B). ​​         [CLAT 2011]

 

Q10. Principle: A contract based on a mistake of law is valid and not voidable.​​ 

Facts: A owes a debt of Rs. 1000 to B. Both A and B mistakenly think that the debt is time barred under the Indian law of limitation due to which they agree that A shall pay only Rs. 500 to B to clear the debt.​​ 

(A) The contract between A and B is valid.​​ 

(B) The contract between A and B is not valid.​​ 

(C) The contract between A and B is valid but B can separately claim Rs. 500 from A in a court of law.​​ 

(D) None of the above.​​ 

 

 

Answer Key with explanations

Question 1 - Option (A) is the correct answer.​​ 

Explanation - As per the given facts, the consent of B had not been freely obtained so, as per the given principle, the agreement is enforceable only at the option of B.​​ 

Question 2 - Option (B) is the correct answer.​​ 

Explanation - The doctor occupies a dominating position in respect of the patient so, as per the given principle, the contract can be enforced against the patient.​​ 

 

Question 3 - Option (D) is the correct answer.​​ 

Explanation - As per the given legal principle, the deliberate concealment of facts by Zameer amounts to fraud.​​ 

 

Question 4 - Option (C) is the correct answer.​​ 

Explanation - Mere silence of A about the unsoundness of the horse shall, as per the given principle, not constitute fraud.​​ 

 

Question 5 - Option (D) is the correct answer.

Explanation - The given facts indicate that consent of Y had been obtained by X by coercion so the contract between X and Y is voidable at the option of Y.​​ 

 

Question 6 - Option (B) is the correct answer.​​ 

Explanation - As per the given legal principle, the directors of the company are liable for misrepresentation because they made a false statement in the prospectus without an intention to deceive.  ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​​​ 

 

Question 7 - Option (C) is the correct answer.​​ 

Explanation - As per the given legal principle, A cannot get the agreement enforced against B so B will succeed in the case brought by A.​​ 

 

Question 8 - ​​ Option (C) is the correct answer.​​ 

Explanation - As per the given legal principle, mere silence of X about the unsound state of the horse does not make him liable for fraud.​​ 

 

Question 9 - Option (D) is the correct answer.

Explanation - The consent of Chulbul to making Baalu the CEO had been obtained by coercion so he is justified in refusing to enforce the contract which makes option (A) correct. Since Baalu was the one who had abducted Aadil, option (B) is also correct so the correct answer is both (A) and (B).  ​​ ​​​​ 

 

Question 10 - Option (A) is the correct answer.​​ 

Explanation - As per the given principle, the contract between A and B is valid. The given facts are insufficient to decide whether option (C) can be considered as correct so option (C) should be ignored. ​​ 

 

 

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