Read the following cases independent of each other and answer the questions accordingly.

a) ABC conceals the fact that a property has severe structural damage and sells it as being in excellent condition to induce XYZ (buyer). The buyer relies on this false information and purchases the property, Later on, he discover the deceit. This is not a valid contract as it is not meeting a condition of free consent to the parties. Identify that condition and comment on it.

b) A teacher asked his student to sell his car for an unreasonably low price in exchange for promising full marks in the final examination. Is this a legal contract? Explain with reason in either case.

c) Mr. Y bought a horse from Mr. X for Rs. 200,000. Mr. X claims the horse can be used on the farm. It revealed that the horse is lame and Mr. Y cannot use him on his farm. Here Mr. X knowingly deceived Mr. Y. Is this a legal contract? Why or why not?

d) An employer exercises his influence over his employee so as to enter into a contract or agreement by compelling him to accept the terms and conditions which are not otherwise in his favor would lead to an agreement caused by use of undue influence. What is the legal status of this contract?

Solution:

a) The condition of free consent that is not being met in this case is "Misrepresentation." ABC has concealed the severe structural damage of the property and provided false information about its condition, inducing XYZ to buy it. Misrepresentation involves making false statements to deceive the other party. In this scenario, the lack of accurate information prevents XYZ from giving free and informed consent, making the contract voidable.

b) The situation described involving the teacher and the student does not constitute a legal contract. The element that makes it invalid is "Consideration." While consideration is essential for a valid contract, the exchange here involves an unfair and unreasonable request (selling a car at an unreasonably low price) in exchange for a promise of full marks in the final examination. This lacks a lawful consideration, and contracts based on such arrangements are generally considered void.

c) In this case, where Mr. X knowingly deceived Mr. Y about the horse's condition, the legal term that applies is "Fraud." Fraud involves intentional deception to induce another party to act to their detriment. A contract based on fraud is not legal, as it lacks free consent. Mr. Y was misled about the usability of the horse, and the contract can be considered voidable due to the fraudulent misrepresentation.

d) The situation described represents a contract influenced by "Undue Influence." If the employer exercises influence over the employee to compel them into an agreement with unfavorable terms, it is considered undue influence. Contracts formed under undue influence are not legally valid, as they involve unfair persuasion that exploits a party's position of trust or vulnerability. Such contracts are voidable, and the aggrieved party can seek legal remedies to set aside the contract.