Model Answer
0 min readIntroduction
Undue influence, as defined under Section 14 of the Indian Contract Act, 1872, is a subtle form of coercion that undermines the free will of a party to a contract. It arises when one party is able to dominate the will of another, leading to an unfair advantage. Unlike coercion, undue influence doesn’t involve physical threats but rather a position of power or trust. Establishing undue influence is crucial for a plaintiff seeking to avoid a contract, and it necessitates proving specific elements and demonstrating the existence of certain relationships that create a presumption of its existence.
Proving Undue Influence: Two Key Points
In an action to avoid a contract on the ground of undue influence, the plaintiff must establish two crucial points:
- That there existed a relationship between the parties where one party had dominance over the other. This dominance could stem from a position of power, trust, or dependence. The plaintiff must demonstrate that the defendant was in a position to influence their will.
- That the transaction is manifestly disadvantageous to the plaintiff. The contract must be demonstrably unfair to the plaintiff, meaning it’s one they wouldn’t have entered into had they exercised their free will. This doesn’t necessarily mean the transaction is illegal, but it must be clearly unfavorable to the plaintiff.
Relationships Leading to Presumption of Undue Influence
Certain relationships automatically raise a presumption of undue influence, shifting the burden of proof to the defendant to demonstrate that the contract was entered into freely and with full understanding. These relationships are outlined in Section 14 of the Indian Contract Act and include:
- Parent and Child: A parent often has significant influence over their child, particularly if the child is financially dependent.
- Guardian and Ward: A guardian has a fiduciary duty to act in the best interests of their ward, and any transaction benefiting the guardian is viewed with suspicion.
- Trustee and Beneficiary: Similar to a guardian and ward, a trustee must act in the beneficiary’s best interests.
- Debtor and Creditor: Where the creditor is in a position to dictate terms to a desperate debtor, undue influence can arise.
- Solicitor and Client: A solicitor (lawyer) has a duty of confidentiality and trust towards their client, and any transaction benefiting the solicitor is subject to scrutiny.
- Doctor and Patient: A doctor’s position of trust and the patient’s vulnerability can create an environment ripe for undue influence.
- Religious Advisor and Devotee: A religious advisor can exert significant influence over a devotee’s beliefs and decisions.
Illustrative Examples
Consider a scenario where an elderly, ailing parent transfers a substantial portion of their property to their son, who is also their sole caregiver. This transaction, given the parent-child relationship, would raise a presumption of undue influence. The son would need to prove that the transfer was made voluntarily and with full understanding by the parent.
Similarly, if a doctor convinces a vulnerable patient to invest in a business venture the doctor owns, this could be deemed undue influence. The patient’s trust in the doctor, coupled with their potential health concerns, creates a situation where their free will may be compromised.
Distinguishing from Coercion
It’s important to distinguish undue influence from coercion. Coercion (Section 15) involves physical threats or acts that compel someone to enter into a contract. Undue influence (Section 14), however, operates on the mind, exploiting a position of trust or dominance. While both vitiate free consent, the methods employed are fundamentally different.
| Coercion | Undue Influence |
|---|---|
| Involves physical or mental threat. | Involves a relationship of trust and dominance. |
| Directly compels action. | Subtly influences the will. |
| Makes the party fear for their safety. | Exploits vulnerability and dependence. |
Conclusion
In conclusion, establishing undue influence requires proving a dominant-subservient relationship and a manifestly disadvantageous transaction. The law recognizes certain relationships where a presumption of undue influence exists, placing the onus on the dominant party to prove the fairness of the contract. Understanding these principles is vital for protecting vulnerable parties and ensuring that contracts are entered into freely and with genuine consent, upholding the integrity of contractual agreements under the Indian Contract Act, 1872.
Answer Length
This is a comprehensive model answer for learning purposes and may exceed the word limit. In the exam, always adhere to the prescribed word count.