Essay Title: “Factors that affect free consent in a contractual agreement under the Contract Act 1950”.
Since a contract will only be binding if the parties voluntarily consent to it, it is obvious that where one party is forced to consent by threats or undue persuasion by the other, that consent should be invalid.One form of such threats is ‘coercion’ and has been defined in section 15 of the Contracts Act for the purposes of section 14 (as discussed in para 2.1) which, among others, require ‘free consent’ of contracting parties. The latter section goes on to provide that consent is free when it is not caused by ‘coercion’ as defined by section 15, or others such as ...view middle of the document...
In any case, its importance is greatly diminished light of the wide definition of coercion under the Contracts Act which includes ‘the unlawful detaining or threatening to detain any property, to the prejudice of any person whatever’ |
2. Undue Influence
Section 16 of Contracts Act, 1950 defines undue influence as an act of dominating one's mind until one cannot think for oneself. There are two types of undue influence, namely the presumed undue influence and normal undue influence.
Presumed undue influence is assumption of presence of undue influence. Relationships that give rise to presumed undue influence are doctor and patient, parent and child, lawyer and client, religious advisor and disciple, etc. The parties being sued have to prove that he has not influenced another party.
Normal undue influence requires the party who sue to prove the presence of undue influence. Once the period of undue influence elapses, the contract can be repudiated within reasonable time.
The existence of undue influence in the formation of a contract can lead to its being flouted by the party who claims to have been influenced to agree to it.
This is because all contracts depend on “free consent” and consent is said to be free only if it is not caused by undue influence. This makes it necessary to understand what “undue influence” means.
A starting point would be Section 16 of the Contracts Act 1950 which states the general principle and the emphasis where such influence is deemed to exist and lays down rules for establishing on whom the burden of proof is in certain situations. It states: “A contract is said to be induced by ‘undue influence’ where the relations subsisting between the parties are such that one of the parties is in a position to dominate the will of the other and uses that position to obtain an unfair advantage over the other.”
The word “undue influence” has the tendency to make people feel that it would include situations where one party is about to persuade the other through some kind of influence in a general sense. But this may not be enough.
However if the section is looked at carefully it is obvious that there are essential elements namely a relationship in which one party is dominant and the use of such dominance to obtain an unfair advantage Apart from the general provisions and principles relating to undue influence the Contracts Act 1950 specifically sets out situations where a person is deemed to be in a position to dominate the will of another. These are:
(a) where he holds a real or apparent authority over the other, or where he stands in a fiduciary relation to the other; or
(b) where he makes a contract with a person whose mental capacity is temporarily or permanently affected by reason of age, illness, or mental or bodily distress.
The effect of these stipulations is that where it can be established to support this presumption then it is not necessary to go any further to establish that such a...