Business Law
Uploaded by moughera on Dec 17, 2008
Brief Notes on BUSINESS LAW for B.Com/B.S students
Moughera Waqas
17-08-2008
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Chap 5
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Consent
Free consent and its effects
Coercion
Undue influence
Fraud (section 17)
Fraud and its effects
Misrepresentation
Mistake and its effects
[Terms and symbols used]
P.P.C Pakistan Penal Code
/ or
Consent (section 13) (approval/assent/agreement)
“Two or more persons are said to be consent when they are agree upon the same thing in the same sense”.
Free Consent (section 14) (free assent/agreement)
“Consent is said to be free when it is not caused by coercion, fraud, misrepresentation, undue influence and mistake”.
Coercion (section 15) (compulsion/intimidation/force/unwillingness)
“Coercion is the committing or threatening to commit, any act forbidden by the Pakistan Penal Code, or the unlawful detaining or threatening to detain any property to the prejudice of any person whatever with the intention of causing any person to enter into a agreement”.
1. Committing offence (obtaining or attempt to obtain the consent through an act forbidden by P.P.C)
2. Unlawful detaining or threatening to detain (to obtain the consent of a person to enter into an agreement)
3. Threat against any third party (i.e. in which the concerning aggrieved person has property or some interest)
4. Presence of Pakistan Penal Code (is immaterial, presence/non-presence makes no difference)
Effects of Coercion
1. The contact becomes voidable at the option of the aggrieved person/party, the aggrieved party/person has two options
a. may compel the other party for specific performance (if deems fit)
b. ma set aside the contract
2. Section 64if the aggrieved party decides to set aside the contract he must restore any benefits received by him under such contract
Undue influence (section 16(1)) (undue use of power/authority/control)
1. Position to dominate (one of the two parties must be in position to dominate the other party, i.e. having a superior authority over the other)
2. Undue advantage (person having the superior authority must obtain an undue advantage with the use of his power)
a. case if mental distress (it is easy to compel a person having temporary/permanent defective mental capacity to enter into a contract even on terms against himself, so it is a voidable contract on the option of defective person)
b. real or apparent authority (the relation between the dominant and dominee can either be of real type or the apparent type, i.e. a police officer and a criminal, a doctor and his poor patient)
c. fiduciary relation (dominance due to the natural love and affection, mutual trust and confidence)
Burden of Proof (no one carries the burden of proof, only the status of the parties may prove the existence of the undue influence)
Distinction between coercion and undue influence
Coercion || Undue Influence
To do any act not involving the...