Difference Between Coercion and Undue Influence | Law Optional Notes for UPSC PDF Download

Coercion and Undue Influence in Contract Law

Coercion

• Definition: Coercion, within the realm of contract law, involves obtaining consent for an agreement through the use of threats, force, or intimidation against the other party.
• Explanation: In simpler terms, coercion occurs when one party compels another to agree to a contract under the influence of fear or duress.
• Example: For instance, if Party A threatens physical harm to Party B unless Party B signs a contract, this would constitute coercion.
• Legal Implication: Contracts formed under coercion are typically deemed voidable, providing the coerced party with the option to uphold or reject the contract.
• Consequences: If the coerced party opts to void the contract, they can seek release from their obligations due to the involuntary nature of their consent.

Undue Influence

• Definition: Undue influence occurs when one party takes advantage of a position of power over another to manipulate their decision-making.
• Explanation: This influence can arise from a variety of factors such as a fiduciary relationship or the vulnerability of one party.
• Example: If a mentor persuades a mentee to sign a contract that heavily favors the mentor's interests, this could be considered undue influence.
• Legal Implication: Contracts tainted by undue influence are also typically voidable, aiming to protect parties from unfair agreements.
• Remedies: The party subjected to undue influence may seek to have the contract set aside or modified to rectify the imbalance caused by the undue influence.

Understanding Undue Influence

• Undue influence is a key concept in contract law that involves one party exploiting a position of power or trust to manipulate another party's decision-making process, resulting in an unfair or unconscionable agreement.
• Unlike coercion, which typically involves threats or force, undue influence relies on the misuse of a dominant position to control the consent of the other party.
• The party exerting undue influence may not necessarily resort to physical intimidation or explicit threats. Instead, they leverage a special relationship, such as a fiduciary duty or a position of trust, to apply psychological or emotional pressure on the vulnerable party.
• This kind of influence significantly affects the weaker party's capacity to make independent and well-informed decisions.

Examples of Undue Influence

• A doctor pressuring a vulnerable patient into signing a contract that primarily benefits the doctor illustrates a case of undue influence.
• An attorney taking advantage of their client's trust to secure an unfair advantage in a contractual agreement also demonstrates the misuse of undue influence.

Difference Between Coercion and Undue Influence

Meaning

• Coercion: Coercion involves forcing or threatening a party who is unwilling to enter into a contract.
• Undue Influence: Undue influence refers to influencing a person's will through psychological pressure or taking advantage of an existing relationship.

Nature of Offence

• Coercion: Considered a criminal offence involving the use of force or physical violence.
• Undue Influence: Not a criminal offence but renders the contract voidable if proven.

Legal Provisions

• Coercion: Covered under Section 15 of the Indian Contract Act 1872.
• Undue Influence: Addressed under Section 16 of the Indian Contract Act 1872.

Relationship of Contracting Parties

• Coercion: No prior relationship between the parties involved.
• Undue Influence: Requires an established relationship between the parties.
• Actions:
  • Coercion: Involves threats, physical violence, or force to obtain consent.
  • Undue Influence: Involves psychological pressure or exploiting emotional vulnerabilities.
• Aim:
  • Coercion: Aims to force a person into a contract for the coercing party's benefit.
  • Undue Influence: Used to take advantage of the other party's weakness or vulnerability.
• Burden of Proof:
  • Coercion: The burden of proof lies with the aggrieved party to demonstrate the use of force or threats.
  • Undue Influence: The burden of proof lies with the dominating party to show their influence was not improper.
• Examples:
  • Coercion: Party "A" threatens harm to party "B" if party "C" does not sell property to "A".
  • Undue Influence: A teacher promises a student full marks in exchange for the student selling their car at an unreasonably low price.

Below is a table to distinguish between Coercion and Undue Influence:

Final Thoughts

• Coercion involves using force or threats to obtain consent, while undue influence is the improper use of power or trust to manipulate someone into an agreement.
• Coercion is a criminal offense, while undue influence is not.
• Both concepts aim to protect the integrity of contracts and ensure that parties enter into agreements willingly and fairly.
• Understanding the differences between coercion and undue influence helps safeguard the rights of parties involved in contractual relationships and promotes fairness in contractual dealings.