Coercion in Contract law

Introduction:

Consent is regarded to be the most important component of a contract since its inception. There are variety of factors, which affects the consent of a person out of which coercion is one of them. This write up covers demonstrations that are managed under coercion, the demonstrations that fall outside its scope. Other than that, this article tries to draw a line between Duress (English Law) and Coercion (Indian law), counts on who bears the burden of proof and how coercion can affect the contract.

Meaning:

Coercion is the threat or use of force by one party against another in order to force the other to enter into an agreement. In other words, coercion is threatening to commit any act that is prohibited by the Indian Penal Code, detaining, or even threatening to detain any property, with the sole motive of compelling a person to enter into a contract.

Essentials:

Any act that amounts to coercion must possess the following essentials:

  1. There must not be merely a threat but the act should be such as to be punishable under the Indian Penal Code, for an act to be forbidden by the Indian Penal Code.
  2. The act must have been done or threatened with the intention of causing to enter into an agreement.
  3. It includes physical force, fear and even threat to goods.
  4. It is irrelevant whether the Indian Penal Code is or is not in force in the place where the coercion has taken place.
  5. Coercion may be advanced from anybody even a person who is not a party to the contract and may be directed against even a member of his household not necessarily the other contracting party.

Consequences:

The following consequences will arise if an agreement is made out of coercion:

  1. The party whose consent was taken through coercion, on his option contract can be voidable.
  2. A person who has been given money or something in kind under coercion must repay or return it.
  3. Under the Specific Relief 1963, a person may rescind the contract within a reasonable time.

Burden of Proof:

The party claiming coercion as a defence bears the burden of proof. The burden of proof on him is heavier. It is so as mere probability or suspicion does not amount to coercion. To establish coercion a person must prove there was a threat that was forbidden by law and that compelled him to get into a contract that otherwise he would not have.

Threat to commit suicide: Will it amount to coercion?

By threatening to commit suicide, a person can get consent to an agreement. As a result, the question of whether threatening to commit suicide is an act prohibited by the Indian Penal Code and so amounts to coercion may emerge.

Judgments on coercion:

  • Chikkam Ammiraju v. Chikkam Seshamma[i]:

In this case, the husband threatened to commit suicide if his wife and child did not sign a release document in favor of his brother. Under threat, the wife and son signed the release document. The question was whether threatening to commit suicide constituted compulsion. The Court found that the threat of suicide constituted coercion under Section 15 of the Indian Contract Act, 1872, and that the release instrument was thus voidable. It was also noted that when a person commits suicide, he puts himself beyond the reach of the law and, by extension, any punishment. An attempt to commit suicide, on the other hand, is punishable under the Indian Penal Code, implying that it will amount to coercion.

  • Muthta versus Muthu Karuppa[ii]:

An agent declined to pass over a business’s account books to a new agent unless the principal agreed to free him from all liability. The principal was required to provide the deed as requested. The release document was granted under coercion and at the principal’s discretion, according to the court.

International perspective – Coercion and Duress:

Duress is defined as real or threatened violence towards a person under English common law. It essentially covers just the danger of loss or bodily injury, including incarceration, but not the threat of property damage. There is a delicate line between duress, which is a smaller feature of English law, and coercion, which is a broader part of Indian contract law.

  1. Coercion in India refers to the act of doing or threatening to perform an act that is prohibited by the Indian Penal Code. Duress, on the other hand, is a legal term that relates to real or threatened violence. In India, compulsion is limited to activities prohibited under the Indian Penal Code; however, this is not the case in England.
  2. Coercion can be used against a person or their property in India. It indicates that detaining or threatening to detain any, property can be used as a kind of coercion. In England, however, duress is defined as acts or threats directed at a person rather than his possessions.
  3. Coercion in India might come from someone who is not even a party to the contract. It can also be addressed against a person who is not a contract party (stranger). Coming back to England, duress should only come from the contracting party and should be directed at the contracting party, his wife, parent kid, or other close family.

To summarize, every contract entered under duress is voidable at the request of the injured party.

Conclusion:

Coercion has been clearly defined in Section 15 of the Indian Contract act, 1872. Coercion is one of the primary factors that impacts an individual’s decision; it forces him to engage into a contract that he would not have entered into otherwise. The section also explains how a person might tell whether or not an act is coercive. It has been a well-established fact that in order to make any valid contract, it is essential that there should be no coercion applied.

References:

  1. Avni Kaushik, Free Consent Under the Indian Contract Act, 1872, Blog iPleaders, https://blog.ipleaders.in/free-consent-3/
  2. Bhavya Bose, Duress v. Coercion in law of Contract, Legal Service India, https://www.legalserviceindia.com/legal/article-2853-duress-v-coercion-in-law-of-contract.html
  3. Akash, What is the meaning of coercion in Contract law, Legal Katta, https://www.legalkatta.in/2021/03/what-is-meaning-of-coercion-in-contract-law.html
  4. Harsh Mishra, A Critical Analysis on Coercion With Respect To Indian Contract Act, http://docs.manupatra.in/newsline/articles/Upload/94FBB7C2-19A0-483D-AE76-9C9BC8A35E4C.pdf
  5. Advocatespedia, COERCION WITH RESPECT TO INDIAN CONTRACT ACT, 1872, Adocatespia The Law Encyclopedia, https://advocatespedia.com/COERCION_WITH_RESPECT_TO_INDIAN_CONTRACT_ACT,_1872

[i] Chikkam Ammiraju v. Chikkam Seshamma, (1917) 41 Mad 33.

[ii] Muthta versus Muthu Karuppa, (1927) 50 Mad 786.

Aishwarya Says:

I have always been against Glorifying Over Work and therefore, in the year 2021, I have decided to launch this campaign “Balancing Life”and talk about this wrong practice, that we have been following since last few years. I will be talking to and interviewing around 1 lakh people in the coming 2021 and publish their interview regarding their opinion on glamourising Over Work.

IF YOU ARE INTERESTED IN PARTICIPATING IN THE SAME, DO LET ME KNOW.

Do follow me on FacebookTwitter  Youtube and Instagram.

The copyright of this Article belongs exclusively to Ms. Aishwarya Sandeep. Reproduction of the same, without permission will amount to Copyright Infringement. Appropriate Legal Action under the Indian Laws will be taken.

If you would also like to contribute to my website, then do share your articles or poems at secondinnings.hr@gmail.com

In the year 2021, we wrote about 1000 Inspirational Women In India, in the year 2022, we would be featuring 5000 Start Up Stories.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Create a website or blog at WordPress.com

Up ↑

%d bloggers like this: