Consent and Free Consent

consensus ad idem or identity of minds ie

According to ofSection 10
essential element a valid contract. Section 13 of the Indian Contract Ag
are saiad to consent when, they agree
defines consent as TWo or more personS 99

uponthe same thing in the same sense.

in the sama
Thus, if the parties have not agreed upon the same thingAccording
formed. th
sense there is no real consent and hence no contract is
Pollock and Mulla, 10th Edition, page 134, the expression "the same thing
in
means *the whole content of the agreement, whether it consists, wholly or
acts or
part, or delivery of material objects, or payment, or other executed
promises."
In Raffles v. Wichelhaus, (1863) 2 H&C 906, it was held that if two
persons enter into an apparent contract concerning aparticular person or ship.
and it turns out that each ofthem, misled by a similarity of name, had different
person or ship in his mind, no contract would exist between them. In this
case, two parties entered into an agreement for the sale of cargo to arrive "er
Peerless from Bombay." There were two ships of the same name sailing
about the same time from Bombay. It turned out that both of the parties misled
bysimilarity of name, had a different ship in mind. The contract was held to
be void for lack of consensus ad idem.
Such real consent may not exist either becauseone or both the contracting
narties are under a mistake as to the identity of the other contracting party or
as tothe natureofthe transaction or both parties have different subject-matter
in mind. In such cases mistake operates as to negate consent and
prevent the
formationof any agreement.
Moreover, where the mistake oes not defeat consent, e.g., where the
teoeting parties may have agreed "upon same thing in the
sh ofthe parties might have given thneir consent same sense"
labouring under a mistake
uA COntract which is regutar in al
Q. 1. other respects may still fail if consent of
one of the parties is not free.
[LL.B. Elucidate with the help of case law.
Exam.,
asto a matter of fact essential to the agreement." Section 20 declares that
where boththe parties to an
agreement are under a Thus aswhere
factessential to the agreement, the agreement is void.mistake to athere
matteris ofa
Common mistake, i.e. both the parties make the same mistake as
to a matter of
fact essential to the agreement, the agreement is void. Such a mistake may
relate to the existence of the subject matter, its identity, title of the parties
it, substance off the subject-matter or mistaken assumption. The Section gives
the following illustrations:
(a) Aagrees to sell to B a specific cargo of goods supposed to be on its
wayfrom England to Bombay. It turns out that, before the day of the
bargain, the ship conveying the cargo had been cast away, and the
goods lost. Neither party was aware of these facts. The agreement is
void.
horse was
(b) Aagrees to buy from Bacertain horse. It turns out that the
dead at the time of the bargain, though neither party was aware of the
fact. The agreement is void.
life of B, agrees tosell it toC, B
(c) A, being entitled to an estate for the
parties were ignorant
was dead at the time of the agreement, but both
of the fact. The agreement is void.
opinion as to the value of the thing which forms the subject
Anerroneous deemed a mistake as to a matter of fact
agreement is not to be
matter of the force in India,
(Explanation to Section 20). But a mistake as to a law not in
effect as a mistake offact(Section 21 ). Section
same
e.g.,foreign law, has the contract is not voidable because it was caused
that the
21further makes itclear in India. Thus ignorance of Indian law is
law in force voidable
by a mistake asto any Act further provides that a contract is not
no excuse. The
Contract
parties to it being under a mistake
caused by one of the
merely because it was 20, 21 and 22 have been discussed
matter of fact (Section 22). Sections
ds toa formation of an
later in this chapter. and prevent the
mistake may
m negate consentagreement void if it relates to a
Therefore, 13or render an commonto both
under Section mistake is
greement
to the agreement and such the scope of Sections 13
matter of fact essential case does not fall within agreement may be
20). Ifthe though the
the parties(Section has no operative effect
misrepresentation. But ifthere is a
or 20, mistake as such such as fraud or as regards the nature
voidable for other reasons person contracted with or branch ofthelaw
regards identity of not voidable. This
mistake as agreement is void and
of transaction the
"upon thesamething
agree no
0f contract is very complex. contract parties must real consent. Ifthere is no
be there is
For the formation of a |3). L.e.,there must existence. When
in the same sense (Section not come into
does
real Consent, the contract
 consent at all, Salmond describes it as Error in Consensus, Ontra
certain cases there is real consent, but one of the parties has
Hohe wmiceovngeshter,xn
given his
not out of his tree will but due to factors in the absence of which
have given his consent. Consent so given is said to be not free
Section 14 provides that consent is said to befree when ittis not
() coercion, as defined in (Section 15), or caused h
(2) undue influence, as defined in Section 16, or
(3) fraud, as definedin Section l7, or
(4) misrepresentation, as defined in Section l8 or
(5) mistake, subject to the provisions of Sections 20, 21 and 22
Consent is said to be so caused when it would not have been given
the existence of such coercion, undue influence, traud, but for
mistake. misrepresentation or
Mistake may operate to negate consent and prevent the formation of an
agreement under Section 13 or to render an agreement void in cases where a
mistake relates to amatter essential to the
common toboth the parties (Section 20). Theagreement
and such mistake is
vitiate consent are coercion undue influence,remaining four elements which
fraud and misrepresentation.
An agreement caused by any one of these
but voidable at the option of the party four vitiating elements, is not void
19,19A). This means that the party whowhose consent was so given (Sections
undue influence, fraud, or gave his consent induced by coercion,
or repudiate it. When the misrepresentation may either enforce the transaction
called 'Error in Causa' consent is caused by any of these four elements it is
(Salmond).
COERCION
According to Section 15 "Coercion is the
commil, any ac1 forbidden by the Indian committing, or threatening to
orthreatening to detain, any Penal Code or the unlawful
with the intention of property, to the prejudice ofany detaining.
causingany person to enter into an person whatever.
Explanation: It
not in force in the is immaterial whether the Indian Penal agreement.
place where the coercion is Code is or is
The following
illustration employed"
English ship on the high seas, is appended to the Section: A, on
amounting to criminal causes Bto enter into an board an
sues Bfor breach of
his act is not
intimidation
contract at
agreement
under the Indian Penal
Code. A
by an acI
the Indian Penal offence by the Calcutta. afterwards
an A
has employed
law of England coercion,
act was done. Code was not in force at the and although Sectionalthough
time when or place 506 of
where the
 Thusconsent is said to be caused by coercion when it is obtained by any
acts:
ofthe following
1.Committing or threatening to commit any act forbidden by the Indian
Penal Code.
2 Unlawful detaining or threatening to detain the property of another.
Coercion invalidatinga contract may be done against aparty to the contract
a third
or against a stranger. It may be done by a party to the contract or by
person. For example, Athreatened toshoot B, the son of C, ifC does not sell
his property to him for a certain price. C agrees to do so. The
consent has
heen obtained by coercion. Similarly where A threatens to shoot B, if he (B)
does not sell his property to Cfor a certain price and B agrees, the contract is
induced by coercion.
1,. Act forbidden by the Indian Penal Code
Anact is said to be forbidden by the Indian Penal Code if it is punishable
other
as an offence by the Code. The Law Commission has suggested that
penal laws should also be included in the definition of coercion.
In Ranganayakamma v. Alwar Setti, (1889) 13 Mad. 214,ahusband young
of her
widow, agreed to adopt a boy under the threat that the body It was held that
adoption.
would not be removed unless she consented to the
adoptionwas not binding upon her asconsent was not free dueto coercion.
the
this case say that there
Pollock and Mulla, 9th Ed. page 134, commenting on obtained
widow's consent was
would have been no difficulty in holding that the
undue influence within the meaning of Section l6 of the Act.
by
iscompulsion oflaw coercion? the
Andhra Sugars Ltd. v. State of AP, AIR (1968) SC $99,
In factory of his area but if he
bound to offer cane to the
canegrower was not Sugar (Regulation
under Andhra Pradesh
did, the factory was bound to accept it that compulsion of law is not coercion.
held
of Supply and Purchase) Act. It was
a contract under Section 10.
Ihe transaction was held to be
Is threat lo sue coercion?
Kishori, (1912) 16 1C 344, it was held that
In AskariMirza v. Bibi Jai per se an act forbidden by the Indian
prosecution is not
Othreaten a criminal only be one forbidden by the Indian Penal
Fenal Code. Such an act could
to file a false charge.
Code if it amounted to athreat
Is threat to commitsuicide coercion?
Chikkam Seshama, AIR 1918 Mad 414, a
InChikkam Amiraju v. sujcide,induced his wife and son to execute
by threateningto commit properties which
person
elease deed in favour of his
brother in respect of certain
suicide amounted to
that the threat of suicide
they claimed as their own. It was held
 meaning of Section 15. Though athreat to commit
within the under the Indian Penal Code, it must be deemed to be
was not punishable
Coercion
forbidden as an abatement of suicide and an attempt to commit ssuicide suicide
The term"any act a
the punishable
bothIndian under the Indian Penal Code.
forbiddenb
Penal Code'" is wider than the term"punishable by the Penal Code
punishment because after
A man who commits suicide escapes
the act, he is out of the reach of the law.
2. Unlawful detaining
commiting
If a person unlawfully detains or gives a threat to detain any property to
person whatever with the intention of
the prejudice of any person causing
any persOn
to enter into an agreement amounts to coercion. In Muthia v.
(1927) S0 Mad. 786, an agent refused to handover the books of a Karrupan,
busines
after the expiry of his term unless the principal gave him the release from all
liability in respect of agency. The principal agreed. It was held that the releae
deed was not enforceable as its consent was obtained by coercion,
Duress
The term duress in English Law is narrower than the term coercion as
defined in Section 15. According to Anson: At common law, duress consist
in actual or threatened violence or imprisonment; the subject of it must be the
ontracting party himself, or his wife, parent, child, or other near relative; and
it must,be inflicted or threatened byy other party to the
must be known to him when he entered into the
contract, or, at leasti
contract". In Skeate v. Beale,
(1840) 11A&E 983, it was held that the duress must be
person, and not merely to his goods. applied to a man's
Effect of coercion
According to Section 19, when consent to an
coercion, fraud or misrepresentation, the agreement agreement is caused
is a contract voidable
the option of the party whose
party at his option may repudiateconsent was so caused. Thus the aggrievo
the contract. If the aggrieved party
rescind the contract then ops
according to Section 64 he must
received by him under the contract to the other restore any
benefi
party.
UNDUE INFLUENCEQ2
Undue influence is another
the option of the party whose element which renders a contract voidables
pressure. It is said to be a consent was so obtained. It is unfair mor
subtle species of fraud obtaine
a. 2. Explain the
essential whereby mastry is
court should prOceedelements of 'undue
in a case when influence'
there is allegation
and of how
discuss th
undue
influence' in a contract. Also
influence in case of reflect upon the und
presumption of
unconscionable bargain.. (LL.B.2013,
 Overthe mind of the victim, by insidous approaches and seductive artifices.
In Smith V. Kay, (1859) 7 HLC 750, Lord Kingdown pointed out that the
principle of undue influence applies to every case where influence is acquired
andabused| where confidence is reposed and betrayed. In Tate v. Williamson,
(1886)2 App. 55, Lord Chelmsford stated the principle of undue influence
ac: Where two persons stand in such a relation that while it continues,
oonfidence is necessarily reposed by one, and the influence which necessarily
growsout of that confidence 1S possessed by the other and this confidence is
abused, or the influence is exerted to obtain an advantage at the expense of
the confiding pafty, the person soavailing himself of his position, will not be
nermitedto retain the advantage, although the transaction could not have
heen impeached if no such confidential relations had existed."
The Supreme Court in Ladli Prasad v. Karnal Distillery Co. Lt., (1964)
1SCR 270, held that Section 16 of the Contract Act is based substantially on
the rules of English Common law. Section 16(1) lays down the law relating to
undue influence in general terms. Section 16(2) gives the cases where a person
is deemed to be ina position to dominate the will of the other. Section 16(3)
deals with unconscionable transaction and burden of proof. The Section is
reproduced below:
where the
"(1) A contract is said to be induced by "undue influence"
relations subsisting between the parties are such that one of the parties is in
position to obtain
aposition todominate the will of the other, and uses that
an uinfair advantage over the other.
to the generaliy ofthe foregoing
(2) In particular and without prejudice position
in a to dominate the will of
principle, aperson is deemed to be
another
Where he holds a real or apparent authority over the other, or where
(a)
to the other; or
he stands in a fiduciary relation is
Where he makes a conrtact with a persan whose menal capacity
(b) illness, or
temporarily orpermanently atfected by reason of age,
mental or bodily distress. the willofanother,
in a posilion to dominate
(3) Where aperson who is and the transaction appears, on the face ofit
Gers intoa contract with him, unconscionable,the burden of provingthat
be
On lhe evidence adduced, to undue influenceshalllie upon the personin
such Contract was not induced byof theother.
apposition lodominale the will appended to the Section:
illustrations are minority, upon
Following advanced money to his son B during his
influence, abond
4) A, having obtains by misuse of parental
B's coming of age
 than the sum due in respect of the
greateramount
from Bfor a
A employs undue
influence.
by disease or age, is induced by B's
advance
(b) A, a man
over him
enfeebled
as his medical attendantto agree to pay
Ban
sum for his professional services. Bemploys undue influence. iunreansoflnuaebnciee
(C) A, being in debt to Bthe money-lender of his village, cContractS a
fresh loan on terms which appear
to be unconscionable. It
lies on B
to prove that the contract was not induced by undue influence.
when there is
A applies to a banker for a loan at atime
(d) the money market, The banker declines to make loan except at i stringency
unusually high rate of interest. A accepts the loan on these terms.
This is atransaction in the ordinary course of business. and the
is not induced by undue influence. contract
Elements of undue influence* Q.3,Q. 4,Q. 5
Section l6(1)gives the following two elements of undue influence:
1. The relationship subsisting between the parties is such that one is in
a position todominate the will of the other; and
2. He uses that position to obtain an unfair advantage over the other.
The party who wants to rescind the contract on the
ground of undue
influence ordinarily must prove both the conditions laid down in Section
16(1). It must be proved first of all that the other party was a
lominate the will of in position to
theaggrieved party. It is only after this that the
arises regarding the secondelement of undue question
v. Devanga Sangha, (1973) A. Mys. 338, it influence. In Smt. Chinnamma
that the person ina position of was held that it is not necessar
athird party may be domination must benefit himself. A benefit to
sufficient. In this case undue influence by office beares
of a society benefiting the society was held to be sufficient to avoid the contradt
In Subhash Chandra Das v.
Court held that, it is well settledGanga Prasad Das, AIR 1967 SC 873,Uk
that the law relating to undue
influence b
See: Examination
Q. 3. What the
Questions No. 7 and 10.
essential ingredients 'undue influence?
of
Q. 4. What is meant by tree (LL.B., December 2010, D.
by undue influence. What consent? When is a
contract said to be
induced
contract is sought to be essentials are to be
proyed and by whomifa
avoided on the ground of undue influence?
a. 5. Discuss the essential [LL.B.,of (Supplmentary). July 2011,DD.u
the Court should ingredients
proceed case
in a 'undue influence'ana explain how
'undue
influence'. Refer relevant case law. where there is allegation of
e-July 2012. D.U
thesameinthe case of agift inter vivos (from one living
inthecase of personinfluence
contract. *The Court trying a case of undue to another)must
as
considertwo things to start with namely: (1) are the relations between the
donor
and the donee such that the donee is in a position to dominate the will
ofthedonor, and (2) has the donee used that position to obtain unfair advantage
overthe donor?"

Acontractcannot be set aside onthe ground of undue influence when

of the parties is not a position to dominate the will of the other, e.g.,
whenthe parties are on equal footing. Illustration (d) appended to the Section
makes the point clear: AAapplies to a banker for aloan at atime when there is
stringency in the market. The banker declines to make loan except at an
unusually high rate of interest. Aaccepts the loan on these terms. This is a
transaction in the ordinary course of business and the contract is not induced
by undue influence.
In Shrimati v. Sudhakar, AIR Bom 122, theCourt said: Influence in
and every
the eye of law has to be contra distinguished with persuation. Any inference/
persuation by one party to the other to contract cannot lead to the
conclusion that such party has influenced the other party. One may by his act
particular act and if
or conduct convince and persuade the other party to do a
volition (may be to his/her
the other party does such an act freely and of own that such act was
disadvantage or even to his/her peril), it cannot be said
not held to be induced
influenced by the other." In the present case, the gift was
undue influence as the gift deed was made by a woman, though illiterate,
by
and was getting agricultural
was intelligent enough to manage her properties
time to time for about twodecades.
from various persons from
land cultivated
Diferent forms of influence and presumption of domination of will
provides that a person is deemed to be in aposition to
Dection l6(2) (a) where he holds a real or apparent authority
ominate the will of another
stands in a fiduciary relation to another or (c)
rer the other or (b) where he
with a person whose mental capacity is
where he enters into a transaction
reason ofage, illness; mental or bodily
by
POrarilyor permanently affected below:
are discussed
distress. These three cases
(a) Real or apparent authority of authoriy are said
beingin positions
The following persons, inter alia,will ofthe other:
to be in a position to dominatethe assessee;
officer in relationto an
(i) an income-tax.
relation to an accused;
officer in
(ii) a magistrate or police
subordinate.
(ii) Superior in relation to a
 (b) Fiduciary relationship
mun
Inthe following cases, fiduciary relationships or a relationship ofof mutual
trust and confidence is said to exist:
(i)) parent and child:
(iü)) guardian and ward;
(iii) trustee and beneficiary;
(iv) solicitor and client;
(v) doctor and patient;
(vi) spiritual advisor and his devotee or disciple:
(vii) woman and her confidential managing agent.
In such cases, it is essential to show that one party relies on the other to
such an extent that complete trust and confidence is placed in the other enablino
him to influence the former. Thus the parties need not be related by blood
marriage or adoption. What is necessary to establish the presumption is tha
their relations are such that one is in a superior position over the other.
According to illustration (a) appended to the Section 16 : A, having
advanced money to his son B, during his minority, upon B's coming of age
obtains, by misuse of parental influence, a bond from Bfor a greater amount
than the sum due in respect of advance. A employs undue influence.
In Allicardv. Skinner, (1887) 36 Ch.D, the plaintiff, an unmarried woman
of 27, became a member of a Church of England sisterhood in 1868 on the
introduction of her confessor, who was the spiritual director ofthe sisterhood.
She, without independent advice, made gifts of her property valued at £850
to the sisterhood. She left the sisterhood in 1879 and in 1884 claimed the
return of her property on the ground that it had been obtained by undue
influence. The Court of Appealheld that the gifts were voidable by reason of
undue influence.
In Mannu Singh v. Umadat Pande, (1890) 12 All523, the Allahabad
High Court set aside a gift of the whole of his property by a Hindu well
adv..nced in years to his spiritual advisor (guru). The only reason for the git
disclosed in the deed was the donor's desire to secure benefits to his soul in
the next world. In the course of judgment the Court said: "Would any
reasonable man in full possession ofhis sensesandnot under unusual influence
of some kind or the other do such a thing?
(c) Mental distress
temporarily or
Aperson issaid to be in distress whose mental capacity is
Pmanently affected due to old age, illness, or mental or bodily distress
which
Such a person can be easily persuaded to give consent to a contract
may be unfavourable to him.
 In Ranee Annapurni v. Swaminatha,(1910) 34 Mad. 7, a poor
was in urgent need of moneyto establish her right to maintenance widow
She was
persuaded by a money-lender to agree to pay 100 percent rate of interest
was held that the money-lender exercised undue influence over the
she was in distress. The court reduced the rate of interest to 24 widow asI
must be noted here that urgent need of money in itselfis not
percent.
of mental distress. (See: illustration (d) above and Raghunath
sufficient evidence
below].
Prasad case
In Inche Noriah v, Shaik Alie, AIR 1929 PC 3, the appellant wac
teeble old woman, unable to leave the house. relying entirely upon th
respondent for everything even for her food and clothes, leaving the
management of her affairs to him, so that she had no knowledge of her own
affairs or as tothe value of her properties and so that she was totally in the
respondent's hands. The appellant executed a deed of gift whereby she gave
to the respondent absolutely the whole of the properties, and left herself
with a total gross income of about 30 dollars a year. It was held that a gif
made under circumstances which gave rise to the presumption must be set
aside unless the donee is able to satisfy the court of facts sufficient to rebut
the presumption.
In Hajrabai v. Jadavbai, AIR 1986 MP, it was held that the mere fact
that the plaintiff was an old and illiterate woman, by itself would not lead to
an inference that the transaction was vitiated by undue influence or fraud or
misrepresentation. The burden was on the plaintiffto prove this. It was further
held that even if the relations were friendly or close, it
the defendants were in a dominant position. It was would not mean that
found that
satisfactory evidence that the woman was indisposed to such anthere was no
extent and
that she was mentally so upset that she was
not capable of
what she was doing. understanding
Effect of undue influence
Section 19 Aprovides that When
undue influence, the agreement is a consent to an agreement is caused by
party whose consent was so caused. contract voidable at the option of the
absolutely or, if the party who was Any such contract may be set aside either
thereunder, upon such terms and entitled to avoid it has
The following conditions as to the received any benefit
(a) A's son ilustrations
has
are
appended
forged signature
B's
to
court may seem just".
section 19A:
threat of to
prosecuting
of the forged note. IfA's son, obtains a
B
a
promissory
bond
note. B under
from A, for the amount
bond aside. sues on this
bond, the Court may Set the
 (b) A, a money-lender, advances Rs. 100 to B, an agriculturist and., by
deinfluence induce B to execute a bond for Rs 200 with interest
at 6% per month. The Court may set the bond aside, ordering Bto
repayRs. 100 with such interest
as may seem just.
Thus, the court has discretion to direct the aggrieved party for giving
backthe benefit whether in whole or in part or set aside the contract without
anydirectionfor refund or benefit.
any
cden of proof and presumption of undue influence4
Burden
In an action to avoid a contract on the ground of undue influence, the
plaintiffhas to prOve that() the other party was in a position to dominate the
willandIthat (ii) he actually used his influence to obtain the plaintiffs consent
But in certain cases presumption of undue influence is raised.
tothe contract.
The effect of such presumption is that once it is shown that the defendant was
ina position to dominate the will of the plaintiff it will be persumed that he
the
must have used his position to obtain unfair advantage. It willbe then for
defendant to showthat the plaintiff freely consented. The presumption is raised
at least in the following cases:
) Unconscionable bargains
(ii) Contracts with pardanashin women influence were
consideration of a case of undue
The three stages for Prasad, AIR 1924
Raghunath Prasad v. Sarju
expounded in the case of
PC66, in the following words: parties to each other must be
between the
"In thefirst place the relationsdomninate the will of the other. Once that
Such that one is ina position to stage has been reached namely, the issue
Position is substantiated the second undue influence (i.e. whether the
the contract had been induced by of this issue a third
wnelher Upon the determination
saction is unconscionable), probandi. If the transaction appearsto be
poini whichis that of onusproving that the contract was not induced
emerges,
onscionable.then the burden of a position to dominate
upon the person who wasin the order of these
undue influence isto lie sure to arise if
Error is unconscionableness ofthe bargainis notthe
the will of the other. Error almost

propositions be changed. The seeks to avoid the contract

ed when he of proof lies on
first thing to be considered. The first thing to be considered is the relations of
these parties. Were they such as to put one in a position to dominate the will
of the other?""
Whether a transaction is vitiated on the ground of undue influence is
primarily a question of fact, (Satgur Parshad v. Har Narain Das, 59 IA
147). It must also be noted that merely because the parties were nearly related
out
toeach other there is no presumption of undue influence. As was pointed
by the Judicial Committee of the PrivyCouncil in Poosathuraiv. Kappanna
Chettiar, 43 Mad 546 (PC1920) and quotedwith approval by the Supreme
Court in Subhash Chandra v. Ganga Prasad, AIR 1967 SC 878:
"It isa nmistake (of which there are good many traces in these proceedings)
to treat undue influence as having been established by a proof of the relations
of theparties having been such that the one naturally relied upon the other for
advice, and the other was in a position to dominate the will of the first in
giving it. Upto that point influence' alone has been made out. Such
influence may be used wisely, judiciously and helpfully. But whether by the
law of India or the law of England, more than mere influence must be proved
so as to render influence in the language of the law, 'undue'. It must be
established that a person is in a position to obtain unfair advantage for himself."
Therefore as between the parties on equal footing, the mere
unconscionable-ness of the bargain does not create the presumption of undue
influence. The mere fact that the bargain is a hard one is no ground in itself
for avoiding the contract.
In Rellachi v. Pakeeran, (2009) 12 SCC95, it was held that relationship
between the parties so as to enable one of them to dominat the will of other
is a sine qua non for constitution of undue influence. The party alleging the
same must prove the same subject to just exceptions.
Unconscionable transactions
who is in a
Section 16(3) provides as follows: "Where a person pos1ition
him, and
to dominate the will of another, enters into acontract with
transaction appears, on the face of it or on the evidence adduced, to b¡
unconscionable, the burden of proving that such contract was notinduced h.
undue influence shalllie upon the person in aposition to dominate the will of
the other."
According to illustration (c) appended to the Section if A, being in de
to B, the money-lender of his village, contracts a fresh loan on terms which
appears to be unconscionable, it lies on B to prove that the contract was no
inducedby undue influence. Thus, in such acase a presumption is raised tha
the borrower's consent was not free. The presumption is rebuttable, but the
burden of proof is on the party in a position to dominate the will.
Unconscionable transaction means a transaction which is so much to the
advantage of one party and disadvantage to the other that it "shocks the
conscience". Unconscionable means something as shows no regard for
conscience and which is irreconcilable with what is right or reasonable. This
sub-section does not lay down any rule of law but lays down a rule of
evidence. It throws the burden of proving that no undue influence was applied
on a party, being in adominant position in case of unconscionable transactions.
Thus, according to Section TÛ(3), if one person is in a position to
dominate the willof the other and the transaction is unconscionable. the
burden of proving that such contract was not induced by undue influence
shall lie upon the person in a position to dominate the will of the other. As
inted out earlier in Raghunath Prasad case unconscionableness of the
bargain is not the first thing to be proved. Tne tirst question to hedecided is
whether the relation between the parties to each other are such that one isin
aposition to dominate the will ofanother. Therefore, as betweenthe parties
unconscionableness of the
on equal footing
undue influence. In the abovebargain does not create the
presumption of
position to dominate the will of the mentioned case, the lender
was not in a
was unconscionable, it borrower
was held that the burden ofof proof but the bargain
did not shift. This
Thus toshift the burden of proof boththe facts
is so not merely in money lending transactionsmust but bein other formsThiof
established.
unconscionable bargains also.
Distinction between coercion and undue influence
Both coercion and undue influence vitiate consent and render the contract
voidable at the option of the party whose consent was so caused. The following
are the points of difference between the two:
1. Incase of coercion the consent of the aggrieved party is obtained by
committing or threatening to commit any act forbidden by the Indian
Penal Code or by unlawfully detaining or threatening to detain any
property. While in case of undue influence consent is obtained by
dominating the willof the other.
2. Coercion may involve physicalforce, while undue influence involves
moral pressure.
3. There is no presumptionof coercion under any circumstances, while
in the case of undue influence it is presumed in certain cases.
4. There may be criminal liability in case of coercion but not so in case
of undue influence.
5. In case of coercion the contract becomnes voidable under Section 19
and the party avoiding the contract has to restore any benefit he has
received under the contract to the other party according to Section
64. In case of undue influence the contract becomes voidable under
Section 19Aand the court has the discretion to set aside the contract
absolutely, if the aggrieved party has received any benefit, upon such
terms and conditions as may appear to be justifiable.