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Business Environment and Law-Law Of Contract (Indian Contract Act 1872)

Undue Influence & Effect of Undue Influence-Law Of Contract

   Posted On :  07.05.2018 09:54 pm

“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 other.”

Undue Influence 

[Sec. 16 (1)] “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 other.” Three conditions should be fulfilled:

1. The relation between the contracting parties should be such that one party is in a position to dominate the will of the other; and
2. Such party has used that dominant position to enter into a contract with the latter; and
3. Such party has obtained an unfair advantage over the other.

Effect of Undue Influence: 

[Sec. 19 (A)] “When consent to an agreement is caused by undue influence the agreement is a contract voidable at the option of the party whose consent was so caused.

Pardanashin Women: 

A pardanashin woman is susceptible to undue influence and therefore, the law throws around her a “Special cloak of protection” i.e. Where such a woman signs a sale, mortgage, gift or release, the person obtaining her signatures has to prove that the transaction was not only explained to her but also that she had understood the transaction and that no undue influence was exercised on her.
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