The essence of a contract is agreement, i.e. mutual consent, i.e. the parties to the contract agreed upon the same thing in the same sense i.e. Consensus ad idem. Consent of the party is not enough for agreement, but it requires free consent. It is the most important element of the valid contract. When the consent of the one of the party is not free if it is said to be tainted by coercion, undue influence, misrepresentation, fraud or mistake.
Take an overview of the article, to further comprehend the difference between coercion and undue influence.
Content: Coercion Vs Undue Influence
|Basis for Comparison||Coercion||Undue Influence|
|Meaning||Coercion is an act of threatening which involves the use of physical force.||Undue Influence is an act of influencing the will of the other party.|
|Sections||It is governed by Section 15 of the Indian Contract Act, 1872.||It is governed by Section 16 of the Indian Contract Act, 1872.|
|Use of||Psychological pressure or Physical force||Mental pressure or Moral force|
|Purpose||To compel a person in such a way that he enters into a contract with the other party.||To take unfair advantage of his position.|
|Relationship||The relationship between parties is not necessary.||The act of undue influence is done only when the parties to the contract are in relationship. Like teacher - student, doctor - patient etc.|
Definition of Coercion
Coercion is a practice of unlawfully intimidating a person or property, employed to induce a person to enter into an agreement without his independent will. This involves physical pressure. It is an act of compelling a person in such a manner that he doesn’t have any choice rather than entering into an agreement with the other party.
Coercion includes blackmailing, threatening to kill or beat any person, torture, harming the family of a person, detaining property. Moreover, it includes the actual committing or threatening to commit an offence which is strictly prohibited, or forbidden by the Indian Penal Code (IPC), 1860. The acts influenced by coercion are voidable, not void i.e. if the other party whose will is influenced by coercion seems any benefit in the contract, then it can be enforceable.
Example: A threatens B to marry him, or else he will kill her whole family. In this situation, the consent of B is not free i.e. coercion influences it.
Definition of Undue Influence
Undue Influence is a situation in which one person, influences the free will of someone else by using his position and authority over the other person, which forces the other person to enter into an agreement. Mental pressure and moral force are involved in it.
The parties to the contract are in fiduciary relation to each other like a master – servant, teacher – student, trustee – beneficiary, doctor – patient, parent – child, solicitor – client, employer – employee, etc. The dominant party tries to persuade the decisions of the weaker party, to take unfair advantage of his position. The contract between the parties is voidable, i.e. the weaker party can enforce it if he seems some benefit in it.
Example: A teacher forces his student to sell his brand new watch, in a very nominal price, to get good grades in the examination. In this situation, the consent of the student is affected by the undue influence.
Key Differences Between Coercion and Undue Influence
The major differences between coercion and undue influence are as under:
- The act of threatening a person in order to induce him to enter into an agreement is known as coercion. The act of persuading the free will of another individual, by taking advantage of position over the weaker party, is known as undue influence.
- Coercion is defined in section 15 while Undue Influence is defined in section 16 of the Indian Contract Act, 1872.
- Any benefit received under coercion is to be restored back to the other party. Conversely, any benefit received under the undue influence is to be returned to the party as per the directions given by the court.
- The party who employs coercion is criminally liable under IPC. On the other hand, the party who exercises undue influence is not criminally liable under IPC.
- Coercion involves physical force, whereas Undue Influence involves mental pressure.
- The parties under coercion need not be in any relationship with each other. As opposed to undue influence, the parties must be in a fiduciary relationship with each other.
Coercion and Undue Influence both are barriers in the path of free consent of the parties which is an essential element of a contract. That is why the contract is voidable at the option of the party whose will is influenced by the other party.