Difference Between Coercion and Undue Influence

Coercion and undue influence are two distinct legal concepts in contract law that deal with situations where one party’s consent to agree may be compromised.

Both are significant in protecting the integrity of contracts and ensuring that agreements are made voluntarily and fairly. The differences between coercion and undue influence are discussed in the following article.

Coercion Meaning

Coercion is a term used in contract law. It refers to a situation where consent to enter into an agreement is obtained by using threats, force, or intimidation against the other party. In simple terms, coercion involves compelling someone to agree to a contract under the influence of fear or duress.

Under coercion, one party exerts pressure on another party, threatening to commit an act that is prohibited by law or causing harm to the other party or their property if they do not agree to the contract. The threat may involve physical violence, unlawful detention, or any other action that is considered illegal or punishable under the law.

Coercion undermines the voluntary nature of free consent in contracts, which is a fundamental aspect of forming a valid contract. Contracts based on coercion are generally considered voidable, meaning the party who was coerced has the option to either uphold the contract or reject it. If the coerced party chooses to void the contract, it can seek to be released from its obligations due to its consent’s improper and involuntary nature.

Undue Meaning

Undue influence is another legal concept in the context of contract law, and it occurs when one party takes advantage of a position of power or trust to influence the decision-making of another party, leading to an unfair or unconscionable agreement. Unlike coercion, which involves threats or force, undue influence relies on the misuse of a dominant position to manipulate the other party’s consent.

Under the undue influence, the dominating party may not necessarily use physical force or explicit threats. Instead, they may exploit a special relationship, such as a fiduciary relationship or a relationship of trust and confidence, to exert psychological or emotional pressure on the other party. This influence can significantly impact the weaker party’s ability to make independent and informed decisions.

For example, a doctor influencing a vulnerable patient to sign a contract in the doctor’s favour, or an attorney exploiting their client’s trust to gain an unfair advantage in an agreement, would be instances of undue influence.

Difference Between Coercion and Undue Influence

Meaning

Coercion involves using force or threats to compel a party who is generally unwilling to enter into a contract. On the other hand, undue influence refers to influencing a person’s will by another party, often through psychological pressure or taking advantage of an existing relationship.

Nature of Offence

Coercion is regarded as a criminal offence as it involves the use of force or physical violence to extract consent for a contract. Undue influence is not considered a criminal offence in itself but rather a legal concept that renders the contract voidable if proven.

Legal Provisions

Coercion is covered under Section 15 of the Indian Contract Act 1872. Undue influence, on the other hand, is addressed under Section 16 of the Indian Contract Act 1872.

Relationship of Contracting Parties

In cases of coercion, there is no established relationship between the contracting parties. The coercion is exerted externally, typically by someone with no pre-existing relationship with the coerced party. In contrast, undue influence requires an already established relationship between the contracting parties, such as a fiduciary relationship or a relationship based on trust and confidence.

Actions

Coercion involves actions like threats, physical violence, or the use of force to extract consent. Undue influence revolves around psychological pressure or subjecting a person to social dilemmas, taking advantage of their emotional vulnerability or dependence on the influencing party.

Aim

The aim of coercion is to force a person into a contract, typically for the benefit of the party using coercion. On the other hand, undue influence is used when one party intends to take advantage of the other party’s position of weakness or vulnerability.

Burden of Proof

In cases of coercion, the burden of proof lies with the aggrieved party to demonstrate that force or threats were used to obtain their consent. For undue influence, the burden of proof rests with the party who holds a dominating position in the relationship, as they need to show that their influence was not improper or unfair.

Examples

An example of coercion would be if party “A” threatens to harm party “B” if party “C” does not sell their property to “A.” Here, “A” is using coercion to force “C” into the contract.

Conversely, an example of undue influence would be a teacher telling their student to sell them their car for an unreasonably low price in exchange for promising full marks in the final examination.

Below is a table to distinguish between Coercion and Undue Influence:

Final Thoughts

Coercion involves using force or threats to obtain consent, while undue influence is the improper use of power or trust to manipulate someone into an agreement. Coercion is a criminal offence, while undue influence is not, but both concepts aim to protect the integrity of contracts and ensure that parties enter into agreements willingly and fairly. Understanding the differences between coercion and undue influence helps safeguard the rights of parties involved in contractual relationships and promotes fairness in contractual dealings.