undue influence

Under Section 16 of the Indian Contract Act, 1872, a contract is induced by undue influence where one party is in a position to dominate the will of the other and uses that position to obtain an unfair advantage. A person is deemed to be in such a position where he holds real or apparent authority (parent, employer), stands in a fiduciary relation (lawyer, guardian, spiritual adviser), or deals with someone whose mental capacity is affected by age, illness or distress.

If the transaction appears unconscionable, the burden shifts to the dominant party to prove there was no undue influence. The contract is voidable at the option of the influenced party (Section 19A). Undue influence works on the mind through dominance; coercion works through threats or unlawful acts.

Example

The gift deed executed by the aged patient in favour of his doctor was set aside for undue influence, the doctor having failed to discharge the shifted burden.

In Indian law

• Sections 16 and 19A, Indian Contract Act, 1872
• Subhas Chandra Das Mushib v. Ganga Prosad Das Mushib, 1966 INSC 164: the court must first find a position to dominate the will, then its use to get an unfair advantage

See also

coercion · free consent · voidable contract · fraud

Read more in the study notes

• Conciliation under industrial, family and marriage laws (Alternative Dispute Resolution Systems)
• Phases of negotiation, qualities of a negotiator and power to negotiate (Alternative Dispute Resolution Systems)
• Offences relating to elections, coin and currency (Bharatiya Nyaya Sanhita)
• Burden of proof: exceptions, special knowledge and statutory shifts (Bharatiya Sakshya Adhiniyam)
• Pleadings: fundamental rules, verification and amendment (Order VI) (Civil Procedure Code and Limitation Act)
• Agreement and contract: meaning, essentials and kinds (Contract I)