Undue Influence
What is Undue influence?
According to Section 16 of the Indian Contract Act 1872, “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 others”.
What is Free Consent?
As per the provisions of Section 14 of the Indian Contract Act, consent is said to be free when it is not caused by coercion, fraud, undue influence, misrepresentation, or mistake.
What is Consent?
Consent is when two or more persons agree upon the same thing and in the same sense. So for creating a legal relationship between two people, they must agree to something in the same sense as well.
What is the effect of Undue Influence?
An agreement that is induced by undue influence or where the aggrieved party has entered the contract by getting affected by undue influence is voidable at the option of that party whose consent was taken by influencing him. The act has also established that the performance of such agreements may be avoided either absolutely or by prescribing certain terms and conditions.
What is the effect of Undue Influence?
This occurs when there is a special relationship between the parties. The unique relationships that the law considered to have the effect of undue influence include:
- Parent and child;
- Guardian and ward;
- Solicitor and client
- Doctor and patient;
- Religious leader and follower; and
- Trustee and beneficiary.
Undue Influence : Meaning, Presumption and Effects
According to the Indian Contract Act, 1872, consent is when two or more persons agree upon the same thing in the same sense. To create a legal relationship between two parties to a contract, they must agree to the same thing in the same sense. Here, an agreement will be completed only when both parties to the contract agree or are ready to perform a contract in the same sense or harmony. For free consent in a contract, both parties to the contract should commit to the same thing and must show mutual trust between them.
As per the provisions of the Indian Contract Act 1872, when the relations between the two parties are of the nature that one party is in a position to dominate the decision-making of the other party and the party in the dominant position uses his influence to obtain an unfair and unjust advantage of the other party, such influence is called Undue Influence. It is to be noted that in any case where consent is affected by influence and there is any reposition or betrayal of confidence, the principle of equity shall be applied.
Geeky Takeaways:
- Consent is considered to be the most fundamental component of any contract. Every valid contract works on the principle of consensus ad idem; i.e., meeting of minds.
- Two or more people will be considered to have given consent for a contract when they agree upon the same thing in the same sense.
- To make the contract a fruitful junction between the two parties, consent is required.
- The Indian Contract Act, 1872 makes sure that under the contract, none of the parties to the contract shall have any undue advantage over the other.
- The consent of any party to the contract can be affected by different things; they can be either coercion, fraud, misrepresentation, or undue influence.
Table of Content
- What is a Free Consent?
- What is Undue Influence?
- Presumption of Undue Influence
- Burden of Proof and Rebutting the Presumption
- Effect of Undue Influence
- Conclusion
- Undue Influence – FAQs