9/19/2020

BBA
FREE CONSENT- SEC 14
BUSINESS LAW – LECTURE 13 Coercion
(Sec 15)
CS.TEJPAL SHETH

Mistake
Consent is Undue
influence
said to be (Sec 16)

free when it
is not caused
by:
Misrepresen
tation Fraud
(Sec 18) (Sec 17)

ESSENTIAL ELEMENTS
OF COERCION CERTAIN THREAT - NOT COERCION
 It means
 Act forbidden (prohibited) by IPC or
 Detention or threat to detain the property
Statutory
 Coercion may be exercised by party to contract or any third compulsion Detaining
person Threat to sue • Where law requires Threat to strike property under
to act in particular mortgage
 Coercion may be directed against party to contract of other manner
person
 When coercion is employed- contract becomes void able

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UNDUE INFLUENCE PRESUMPTION OF DOMINANCE OF WILL

 When person holds real or apparent authority over other.

 Contract is entered on undue influence when:  Master & servant

 Relation exist between parties are such that one of them is in position  When he stands in fiduciary relationship over other
 Guardian & child
to dominate will of other; and
 Doctor & patient
 Dominant party use his position to obtain unfair advantage over other  When he makes a contract with person whose mental capacity is temporally or
permanently affected by reason of age, illness or bodily distress
 Effect of undue influence :  No presumption in following relationship:
 Contract is voidable  Landlord & tenant
 Creditor & debtor
 Husband & wife

TEST YOURSELF TEST YOURSELF

 An illiterate old woman made a gift deed of her  A agrees to sell his horse to B. But unknown to both the
entire property to her nephew who managed her parties, the horse had already died at the time of making
affairs. Can a gift be set aside by an illiterate old of the contract. Is it valid contract ? why?
woman ? Explain.

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TEST YOURSELF TEST YOURSELF

 A contract is said to be caused by undue influence-  A threatens to kill B, if B does not agree to sell his property to
 When one is dominant party. A. B's consent is obtained by –
 When one party uses his dominant position to get unfair  Fraud
advantage over the other in a contract.  Undue Influence

 When parties to contract are close friends.  Coercion

 Misrepresentation
 When parties to a contract are near relatives.