Section 19 of Indian Contract Act, 1872: Voidability of Agreements Without Free Consent

Section 19 explains the legal effect of consent obtained by coercion, fraud or misrepresentation. In such cases, the agreement is generally not automatically void; it is voidable at the option of the party whose consent was improperly obtained.

Meaning of Section 19

Under the Indian Contract Act, valid consent must be free. Section 13 deals with consent, while Section 14 explains when consent is free. Section 19 provides the consequence where consent is caused by coercion under Section 15, fraud under Section 17, or misrepresentation under Section 18.

A "voidable contract" is one that is enforceable at the option of one party but not at the option of the other. Therefore, the aggrieved party may ordinarily elect to avoid the contract where the requirements of Section 19 are satisfied.

Text and Effect of Section 19

Important: Undue influence is dealt with separately by Section 19A. Section 19 itself presently refers to coercion, fraud and misrepresentation.

Exception: Ordinary Diligence

The statutory exception concerns consent caused by misrepresentation or by silence that amounts to fraud within the meaning of Section 17. The contract is not voidable on that ground if the affected party had the means of discovering the truth with ordinary diligence.

Explanation: The Representation Must Cause Consent

Fraud or misrepresentation must have caused the consent. If the fraud or misrepresentation did not induce the party to enter the contract, Section 19 states that it does not make the contract voidable on that basis. This requirement connects the wrongful conduct with the decision to contract.

Illustrations Under Section 19

False statement inducing purchase

If A intentionally makes a false statement about the output of a factory and thereby induces B to buy it, B may avoid the contract.

Truth discovered before purchase

If B is given an incorrect representation but examines the factory accounts, discovers the true position, and nevertheless buys the factory, the contract is not voidable merely because of that earlier misrepresentation.

Property subject to a mortgage

If A fraudulently represents an estate as free from encumbrance when it is mortgaged, B may avoid the contract or insist upon performance with the mortgage debt redeemed, in accordance with the statutory illustration.

Concealment of valuable ore

If B discovers ore on A's estate, deliberately conceals it from A and thereby buys the property at an undervalue, the contract is voidable at A's option.

Concealing news of a death

If C receives news of B's death, prevents that information from reaching A, and thereby induces A to sell an interest that has become valuable by succession, the sale is voidable at A's option.

Section 19 and Related Provisions

Section 19 should be read with Sections 13 to 18 of the Act. Section 16 defines undue influence, but the remedy for a contract induced by undue influence is specifically governed by Section 19A. Mistake is dealt with separately, including under Section 20.

Key Points

• Section 19 applies where consent is caused by coercion, fraud or misrepresentation.
• The contract is voidable at the option of the party whose consent was so caused.
• For fraud or misrepresentation, the affected party may in appropriate circumstances insist on performance on the footing stated in Section 19.
• The ordinary-diligence exception applies to misrepresentation and fraudulent silence as specified in the section.
• Fraud or misrepresentation that did not cause consent does not render the contract voidable under Section 19.
• Undue influence is governed by Section 19A.