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    Coercion

    Section15

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    Definition Section 15

    Coercion is committing or threatening to

    commit, any act forbidden by the IPC, or

    the unlawful detaining, or threatening todetain, any property, to the prejudice of any

    person whatever, with the intention of

    causing any person to enter into an

    agreement.

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    CoercionRenganayakamma v. Alwar Chetty (1889).

    Amiraju v. Seshamma (1917).

    Under English law the concept ofDuress isthere which is narrower than Coercion inIndian law.

    It is immaterial whether the IPC is or is notin force in the place where the coercion isemployed.

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    Coercion andD

    uressCoercion need notproceed from a partyto contract or be

    immediately directedagainst person againstwhom the coercion isto be exercised.

    Coercion can beagainst the propertyalso.

    Duress must proceedfrom the party to thecontract in the nature

    of immediate violenceagainst the life orliberty of the otherparty or his family

    members.Detaining propertywill not be Duress.

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    Modern Trends

    Inequality of bargaining power isconsidered to be valid ground for avoiding a

    contract on proof that the terms were veryharsh and unreasonable.

    Economic Duress is a ground to avoid acontract.

    D & C Builders Ltd. v. Rees (1966).Pao On v. Lau Yiu Long (1980).

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    Undue Influence

    Section 16

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    Undue Influence, S. 16Moral coercion.

    Also known as Equitable Fraud.

    Presumption of undue influence applieswhere two parties are in a fiduciaryrelationship.

    In such a relationship the influence isacquired and abused by one of the partiestherein.

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    Presumption of Undue InfluencePresumption of undue influence in fiduciary

    relationship can be rebutted by the party by

    proving that the act of entering into contract was

    the act of free and independent mind.

    Where no fiduciary relationship exist the party

    shall prove that one of the parties acquired an

    influence over the will of the other and produced acontract which otherwise would not have made.

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    Section 16Allcard v. Skinner (1887).

    Wajid Khan v. Ewaz Ali (1891).

    Sub section (1) essentials

    One party in a position to dominate the will

    of another, and

    He uses that position to obtain an unfairadvantage over the other.

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    S.16, Sub-sec.(2) Presumption of

    Undue InfluenceA person is deemed to be in a position to dominate

    the will of another if

    He holds real or apparent authority over the other,or where he stands in a fiduciary relationship with

    that other, or

    Where he enters into a contract with a person

    whose mental capacity is temporarily orpermanently affected by reason of age, illness, or

    mental or bodily distress.

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    Burden of ProofS. 16, Sub-Sec. (3), talks about the burden ofproof.

    If a person is in a position to dominate the will ofanother, and

    If the transaction appears, on the face of to or onthe evidence adduced to be unconscionable,

    Burden of proving that there was no undueinfluence exercised while entering into contract.

    Subhas Chandra v. Ganga Prasad (1967).

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    Raghunath Prasad V. Sarju

    Prasad (1924)Three things are determined by the Court before

    deciding a case of undue influence.

    Relation between the parties is such that one partyis in a position to dominate the will of other,

    That undue influence was exercised by such a

    party, and

    Burden of proof shifts on the person in thedominating position.

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    Pardanashin LadyPresumption of undue influence on theperson supporting the deed.

    Following things must be proved.That the transaction or deed was explainedto her,

    That she understood it, and

    That she deliberately and of her own freewill entered into the transaction.

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    Unconscionable BargainsWhere in the circumstances of a case, it is shown

    that though there was no fiduciary relationship

    existing between two parties yet one of them was

    stronger enough to dominate the will of another,

    court may, in its discretion, declare the contract as

    void.

    Ill. (c) S. 16, a contract of a creditor with alreadyindebted debtor is on the face of it is

    unconscionable and so may be declared to be void.

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    Misrepresentation

    Section 18

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    N

    ature of RepresentationInnocent or intentional.

    Representations made may be intended to

    be a term in the contract or not a term in thecontract.

    This term may be a Condition or Warranty

    if embodied in the contract.

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    M

    isrepresentationMisrepresentation is a ground to avoid the

    contract and is not actionable for damages.

    It must be made without any intention todeceive another party.

    Misrepresentation is innocent when it is

    made by a person in relation to matter offact believing it to be true.

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    M

    isrepresentationIn order to avoid a contract on ground ofmisrepresentation 3 things must be proved.

    There should be a representation orassertion.

    Such misrepresentation must relate to amatter of fact which has become untrue.

    Such misrepresentation must have beenmaterial in influencing the contract.

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    S. 18, C. (1)There must be a representation or positive

    assertion,

    Assertion in a manner not warranted by theinformation of person making it, and

    Information which is not true, though

    person making it believes it to be true.

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    Representation or AssertionIt may be express, by words spoken or written, orimplied, by acts or conduct.

    As a general rule silence does not amount to

    misrepresentation unless,

    Contract is one ofuberreimae fidei,

    Where fiduciary relationship exists between twoparties,

    Where silence as to some fact distorts a positiverepresentation.

    S. 18 Cl. (2).

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    Representation As to a FactEvery person is presumed to know the Law of theland and so misrepresentation as to a matter of lawis not an excuse

    Fact and Promise Misrepresentation, to entitle aperson to avoid a contract, must be of an existingfact and not a mere promise in future, unless it isshown that, the promise formed the basis or part

    of the contract so as to induce a contract. e.g. acontract entered into on the basis that a certainperson A is going to be the director of acompany.

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    Representation As to a FactFact and opinion. a statement of opinion is

    not actionable. But if such opinion is

    deliberately made a statement of fact, it willbe a considered to be a statement of fact.

    Fact and puffery mere statement of puff is

    not considered to be a misrepresentation.

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    Representation to Be False and

    UntrueRepresentation should have become untrue.

    If true when made and the becomes false,

    before the other party could act upon it, theduty is casted upon the person who made

    the representation to communicate the

    change of circumstances to other party.With v. OFlanagan (1936).

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    Representation to Be False and

    UntrueA statement even though literally true may

    be a misrepresentation if it implies the

    additional facts which are themselves false.Curtis v. Chemical Cleaning and Dyeing

    Co. Ltd. (1951).

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    Misrepresentation Material in

    Influencing ContractWhere a representation is not a term in

    contract but has induced the party to enter

    into a contract the contract is voidable at theoption of the influenced party.

    Bannerman v. White (1861).

    Redgrave v. Hurd (1885).Bellotti v. Chequers Developments (1936).

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    ExceptionsMisrepresentation cannot influence or

    induce a transaction where the plaintiff

    Never knew of its existence.Did not allow it to affect his judgment.

    Was aware of the falsity.

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    Fraud

    Section 17

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    Fraud S. 17Derry v. Peek (1887).

    Fraud is proved when it is shown that a

    false representation is been made Knowingly, or

    Without belief in its truth, or

    Recklessly careless whether it be rue orfalse.

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    Taylor v. Ashton (1843)Five essential elements are laid down

    There must be a representation,

    It must be of a fact,It must be made with the knowledge that itis false or without belief in its truth,

    It must be to induce another to act uponassertion,

    The person acting must be damnified.

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    Suppression of FactsTo constitute a fraud thee must be an

    assert

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