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Para 2.4 - Free Consent | KartavyaDesk

Goods Manual

Original Rule Text

2.5 Free consent of both Parties 1. The consent is said to be free when it is not caused by coercion, undue influence, fraud, misrepresentation, or mistake. Consent is said to be so caused when it would not have been given but for the existence of coercion, undue influence, fraud, mis-representation, or mistake. When consent to an agreement is caused by coercion, undue influence, fraud or misrepresentation, the agreement is a contract void able at the option of the party whose consent was caused. A party to a contract, whose consent was caused by fraud or misrepresentation may, if he thinks fit, insist that the contract shall be performed, and that he shall be put in the position in which he would have been if the representations made had been true. 2. In case consent to an agreement has been given under a mistake, the position is slightly different. When both the parties to an agreement are under a mistake as to a matter essential to the agreement, the agreement is not voidable but void. When the mistake is unilateral on the part of one party only, the agreement is not void. 3. Distinction has also to be drawn between a mistake off act and a mistake of law. A contract is not void 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.

What This Means

Para 2.4 of the Manual for Procurement of Goods, 2017, focuses on 'free consent' in government contracts. Essentially, it states that for an agreement to be valid, both parties must enter into it willingly, without being forced, misled, or mistaken. If consent is obtained through coercion (force), undue influence (abuse of power), fraud (intentional deception), misrepresentation (false statement), or a significant mistake, the agreement can be challenged. This rule protects the government and suppliers from unfair contracts.

This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.

Key Points

  • •Consent must be 'free' – not obtained through coercion, undue influence, fraud, misrepresentation, or mistake.
  • •Agreements based on coercion, undue influence, fraud, or misrepresentation are 'voidable' at the option of the wronged party.
  • •Mutual mistake about a crucial element of the agreement makes the agreement 'void'.
  • •A mistake about Indian law does not void a contract, but a mistake about foreign law is treated as a mistake of fact.
  • •The wronged party in a fraud or misrepresentation case can insist on the contract being fulfilled as if the false statements were true.

Practical Example

The Ministry of Textiles issues a tender for the supply of 10,000 meters of Khadi fabric. Supplier 'A', knowing that their fabric is actually a blend and not pure Khadi, falsely claims in their bid that it is 100% Khadi. Based on this misrepresentation, the Ministry awards the contract to Supplier 'A'. Later, the Ministry discovers the truth. Under Para 2.4, the Ministry can either void the contract entirely or insist that Supplier 'A' delivers pure Khadi fabric as originally represented, potentially forcing Supplier 'A' to source genuine Khadi at a higher cost. Alternatively, if both the Ministry and Supplier 'A' mistakenly believed a particular type of dye was permissible when it was actually banned, the contract would be void.

This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.

Frequently Asked Questions

What happens if a supplier threatens to stop supplying goods unless we agree to a higher price?▼
This could be considered coercion. If you agree to the higher price under this threat, the agreement to the higher price might be voidable. You should document the threat and seek legal advice.
If we make a mistake in calculating the tender amount, is the contract automatically void?▼
Not necessarily. A unilateral mistake (only one party is mistaken) doesn't automatically void the contract. However, if the mistake is fundamental and the other party knew or should have known about it, you might have grounds to argue for rescission.
What is the difference between 'void' and 'voidable'?▼
A 'void' contract is invalid from the beginning and has no legal effect. A 'voidable' contract is valid unless the wronged party chooses to cancel it. The wronged party has the option to either uphold the contract or reject it.
Does this rule apply to all types of government procurement?▼
Para 2.4, as part of the Manual for Procurement of Goods, 2017, primarily applies to the procurement of goods. Similar principles of free consent apply to other types of contracts, but the specific rules might be governed by other regulations or legal principles.
What should I do if I suspect fraud in a procurement process?▼
Immediately report your suspicions to your superiors and the appropriate authorities, such as the Central Vigilance Commission (CVC) or the Central Bureau of Investigation (CBI). Document all evidence you have.

This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.

Test Your Knowledge

Question 1 of 3

According to Para 2.4 of the Manual for Procurement of Goods, 2017, which of the following factors does NOT render consent 'free' in a contractual agreement?

Related Rules

Para 9.4Manual for Procurement of Goods, 2024 - Para 9.4 - Chapter 9Para 9.5.5Manual for Procurement of Goods, 2024 - Para 9.5.5 - Chapter 9Para 1.8.2Manual for Procurement of Goods, 2024 - Para 1.8.2 - Chapter 1Para 2.2.2Manual for Procurement of Goods, 2024 - Para 2.2.2 - Chapter 2Para 2.2Manual for Procurement of Goods, 2024 - Para 2.2 - Chapter 2

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