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Monday, 8 August 2011

What is the difference between coercion and undue influence or Discuss the effect of coercion and undue influence on the validity of contract

COERCION :-
It is defined in the following words "Coercion means the committing or threatening to commit ant act forbidden by penal code of the country."


The unlawful detaining or threatening to detain the property or any person with the intention to cause him loss is called coercion. With the intention of causing any person to enter into agreement is also called coercion.

If the consent of the party is obtained under any one of the following circumstance it will be called coercion.


1. Committing Offence :-
If other party commits an offence forbidden by the penal code of the country with the intention of obtaining such consent.


2. Threatening :-
If any person threatens to commit and offence forbidden by the panel code of the country with the intention of obtaining such consent.

Example :- Mr. Aslam (son) threatens to shoot Mr. Akbar (father), if the does not lend a car to Mr. Nawaz (friend of Mr. Aslam). Now this agreement entered int by coercion.


3. Detaining of Property :-
If the other party detains any property unlawful to the prejudice of any person whatever with the intention of obtaining such consent.


EFFECTS OF COERCION ON CONTRACT :-

Voidable Contract :-
Its effect on the contract is that the contract becomes voidable at the option of the person whose consent was obtained by coercion.

In the above example agreement is voidable. Mr. Akbar put it to end or he may uphold the contract.


Note :- The subject of coercion may be directed against any third person.



UNDUE INFLUENCE :-
It is defined in the following words "Contract act is said to be induced undue influence where the relation subsisting between the parties are such that one of the parties is in a position to dominate the will of other and uses the position to obtain an unfair advantage over the other."

There are two main points in this definition.

1. Dominating Position :-
One party is in a position to dominate the other due to relationship.


2. Use of Position :-
Dominating party uses its position to obtain unfair advantage over the other party.

Example :- Undue influence may be induced husband on his wife, father on his son, guardian his ward, doctor on his patient, a master on his servant.

Suppose Mr. Kapoor a guardian of Miss. Shelly (minor) advances Rs. 10 lac to Miss. Shelly due her minority. Miss. Shelly attains the age of puberty. Mr. Kapoor guardian uses his influence of guardian and gets a bond signed by Miss. Shelly for Rs. 50 lac. In this example Mr. Kapoor has used the undue influence.


EFFECT OF UNDUE INFLUENCE :-

Voidable Contract :-
The contract is voidable at the option of the party whose consent is obtained by undue influence.


Note :- The burden of prof lies upon the person in a position to dominate the will of the other party.



DIFFERENCE BETWEEN COERCION AND UNDUE INFLUENCE


1. Penal Code :-

Coercion : Coercion is forbidden by penal code of the country.

Undue influence : About undue influence it is silent.



2. Obtaining of Consent :-

Coercion : In case of coercion one party gets the consent of other party by threatening or physical pressure.

Undue influence : In case of undue influence one party has dominating position over other.



3. Physical or Moral :-

Coercion : Coercion is mainly physical.

Undue influence : Undue influence is of a moral character.

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