Source: 5)c)ii)4m,Jan2025, 6)a)5m,June2019, RTP,June20204 Marks
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Question Scenario

Discuss the essentials of Undue Influence as per the Indian Contract Act, 1872.

Core Legal Challenge

Explain the circumstances in which the person is deemed to be in a position to dominate the will of the other person under the Indian Contract Act, 1872.

Estimated Writing Time: 7 mins Try in Practice Mode

Suggested Answer

1. Provisions of the Act / Applicable Law

The essentials of Undue Influence as per the Indian Contract Act, 1872 are the following:

(c) Mental distress: An undue influence can be used against a person to get his consent on a contract where the mental capacity of the person is temporarily or permanently affected by the reason of mental or bodily distress, illness or of old age.

(d) Unconscionable bargains: Where one of the parties to a contract is in a position to dominate the will of the other and the contract is apparently unconscionable i.e., unfair, it is presumed by law that consent must have been obtained by undue influence. Unconscionable bargains are witnessed mostly in money lending transactions and in gifts.

2. Analysis & Application of Facts

(1) Relation between the parties: A person can be influenced by the other when a near relation between the two exists.

(2) Position to dominate the will: Relation between the parties exist in such a manner that one of them is in a position to dominate the will of the other. A person is deemed to be in such position in the following circumstances:

(a) Real and apparent authority: Where a person holds a real authority over the other as in the case of master and servant, doctor and patient and etc.

(b) Fiduciary relationship: Where relation of trust and confidence exists between the parties to a contract. Such type of relationship exists between father and son, solicitor and client, husband and wife, creditor and debtor, etc.

Exam Strategy Tip

When answering law questions in the CA Foundation exam, follow the "Provision -> Facts -> Conclusion" structure for maximum marks. Ensure to state the relevant sections where applicable to earn bonus marks from the evaluator.

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