Free Consent

Last Updated: August 25, 2020

Definition - What does Free Consent mean?

Free consent refers to an agreement when both parties knowingly and willingly enter into a contract of their own will. This includes agreeing to all of its terms and conditions and a mutual level of understanding of the subject matter in the contract.

For a contract to be enforceable and sound, this consensus must have been gained free of any forms of coercion, cheating, undue influence, fraud or pressure. In addition, the contract must be free of mistakes or misrepresentation by both parties. If consent is gained by any of these means the contract is considered void and unenforceable by law.

Insuranceopedia explains Free Consent

In the case of insurance contracts, even if a policyholder agrees upon the same things in the same sense, the contract is still not valid if they did not have free consent during the signing of the contract.

For example, if a person was forced to sign a life insurance contract by a family member who is the named beneficiary of the contract, then the policy would not be valid because they did not enter into it at their own will. In this case, the contract is considered voidable. The formation of a valid contract is only truly achieved when there is free consent from all parties involved regardless of the cause or reasons.

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