Contract Act, 1872 — Section 15: “Coercion” defined

15. “Coercion” defined. “Coercion” is the committing, or threatening to commit, any act forbidden by the Pakistan Penal Code (XLV of 1860) or the unlawful detaining, or threatening to detain, any property, to the prejudice of any person whatever, with the intention of causing any person to enter into an agreement. Explanation.—It is immaterial whether the Pakistan Penal Code (XLV of 1860) is or is not in force in the place where the coercion is employed. Illustration A, on board an English ship on the high seas, causes B to enter into an agreement by an act amounting to criminal intimidation under the Pakistan of Penal Code (XLV of 1860). A afterwards sues B for breach of contract at 1[Karachi]. A has employed coercion, although his act is not an offence by the law of England, and although section 506 of the Pakistan Penal Code was not in force at the time when or place where the act was done. [16. “Undue influence” defined.—(1) A contract is said to be induced by “undue in

(b)where he makes a contract with a person whose mental capacity is temporarily or permanently affected by reason of age, illness, or mental or bodily distress.

(3)Where a person who is in a position to dominate the will of another, enters into a contract with him, and the transaction appears, on the face of it or on the evidence adduced, to be un conscionable, the burden of proving that such contract was not induced by undue influence shall lie upon the person in a position to dominate the will of the other. Nothing in this sub-section shall affect the provisions of section 111 of the Evidence Act, 1872. (I of 1872).] Illustrations

(a)A having advanced money to his son, B, during his minority, upon B’s coming of age obtains, by misuse of parental influence, a bond from B for a greater amount than the sum due in respect of the advance. A employs undue influence.

(b)A, a man enfeebled by disease or age, is induced, by B’s influence over him as his medical attendant, to agree to pay B an unreasonable sum for his professional services. B employs undue influence.

(c)A, being in debt to B, the money-lender of his village, contracts a fresh loan on terms which appear to be unconscionable. It lies on B to prove that the contract was not induced by undue influence.

(d)A applies to a banker for a loan at a time when there is stringency in the money market. The banker declines to make the loan except at an unusually high rate of interest. A accepts the loan on these terms. This is a transaction in the ordinary course of business, and the contract is not induced by undue influence.