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Answer
Introduction
The word undue means unnecessary, unwarranted,
or more than required. Influence means convincing the mind of a counterparty
through changing his mind or changing his will, but this influence must be
undue i.e. it is not required. Undue influence applies to a relationship which
may be blood relation or some other kind of relation i.e. fiduciary or relation
based on trust. It means the unfair use of one’s superior position to obtain
the consent of a person who is in a weak position.
One of the essential of a valid contract mentioned in section 10 is that the parties
should enter into the contract
with their free consent. According
to section 14, "Consent is said to be free when it is not caused by-
A. Coercion, sec 15,
B. Undue influence, sec 16,
C. Fraud, sec 17,
D. Misrepresentation, sec 18, or
E. Mistake, sec 20, 21 and 22.
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Definition of Undue influence
Undue
Influence is defined under Section 16 of the ICA. When one party is in a
position to dominate the will of others and actually misuses the power, then it
is a case of undue influence, and the contract becomes voidable. When all the
following three conditions are fulfilled then only the situation is considered
as an undue influence:
1.
One
person is in a position to dominate the will of others.
2.
He
misuses his position.
3.
He
obtains an unfair advantage.
1.
Ability
to dominate the will of other
The
dominant position is not defined in the Indian Contract Act but Section 16(2)
provides certain conditions when a person is in a position to dominate the will
of another. Cases, where a person is in a position to dominate the will of others,
are as follows:
I.
There
must be a relation between the parties:
A. Real or apparent authority/relation:
in which one party can be dominated by the other party. For example, father and
son, master and his servant etc.
Illustration:
A having advanced money
to his son for an important work, during an
emergency, now ask his son to pay him a much greater amount, by using his
parental influence, it amounts to undue influence.
B. Fiduciary relationship: Fiduciary relation
is the relation which is made upon the belief and trust between the parties.
One party must believe the other. For example, Advocate and client, teacher and
student, Doctor and patient.
Illustration:
A, a man enfeebled by disease or age, is induced
by B's influence over him as his medical attendant, to agree
to pay B an unreasonable sum for his professional services, B employees undue influence.
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II.
Mental
distress:
An only
mental distress state of mind does not amount to undue influence until the
defendant has used this opportunity to take unfair advantage from another
party.
2.
Presumption
of undue influence
There are
some cases in which the Honorable Courts of India presume the existence of
undue influence between the parties:
I.
Where
one of the parties to a contract is in a position to dominate the will of the
other and contract is prima facie unconscionable i.e. unfair, the court
presumes the existence of undue influence in such cases.
II.
Pardanashin
Woman: When a Woman can be viewed from the screen or is placed behind the
screen i.e. veiled is called Pardanashin Woman. The protection of those women
is rooted in the principle of good conscience and equity. Special laws are made
for these women because they are subjected to ignorance, infirmity, illiteracy,
etc. are thus easily influenced.
Effects of undue influence
Under
Section 19A of the Contract Act, an agreement induced by undue influence is
voidable at the option of that party whose consent was taken by influencing
him/her. Performance of such agreements may be avoided absolutely or on
prescribing certain terms and conditions.
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Important Cases
I.
Mannu Singh V. Umadat Pande:
In this case, a spiritual
leader induced the plaintiff (his devotee) to gift him the whole property to
get benefits of the soul in the next world. It was held that the consent is
obtained by undue influence and hence, it is voidable by the person whose
consent was so induced.
II.
Williams v Bayley:
In this case, a son forged
the signature of his father on certain promissory notes and paid them into his
account. When the truth came to light, the bank manager threatened to prosecute
the son. To avert this, father mortgaged his property to the bank manager.
House of Lords said that father gave his consent under influence and held the
agreement voidable.
III.
Subhas Chandra Das Mushib v.
Ganga Prasad Mushib:
It was held that because the
parties were nearly related to each other, no presumption of undue influence can
arise.
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