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Question
Consists of legal proposition(s)/ principle(s) (hereinafter referred to as 'principle') and facts. Such principles may or may not be true in the real and legal sense, yet you have to conclusively assume them to be true for the purposes of this Section. In other words, in answering these questions, you must not rely on any principle except the principles that are given herein below for every question.
Further, you must not assume any facts other than those stated in the question. The objective of this section is to test your interest in the study of law, research aptitude, and problem-solving ability, even if the 'most reasonable conclusion' arrived at may be absurd or unacceptable for any other reason. It is not the objective of this section to test your knowledge of the law.
Therefore, to answer a question, the principle is to be applied to the given facts and to choose the most appropriate option.
Principle: If a party to a contract agrees to it under the undue influence of any other party then the party under the undue influence may refuse to perform in accordance with the agreement.
Facts: A, a rich youngster became a member of a religious group and soon he was appointed by P the head of the group as his personal secretary. As per the rules of the group, all officials and staff of the group were supposed to stay in the group’s official premises itself. Some days later, A was asked by P to execute a gift deed in favour of P, in which it was mentioned that all immovable properties in his name are being gifted to P. A was unwilling to execute the deed, but he was forcefully restrained by P and his bodyguards in P’s office and made A sign the gift deed. Soon after this A left the group and refused to hand over the property as agreed to in the gift deed. Is A’s action valid?
Options
It is illegal for religious groups to acquire property from its members.
A executed the deed, under compulsion and undue influence, and was right in withdrawing from the contract.
As the gift deed was executed by A, he cannot refuse.
As Gift is also a contract, the consent of A was not obtained by P while executing the deed.
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Solution
A executed the deed, under compulsion and undue influence, and was right in withdrawing from the contract.
Explanation:
A executed the deed under compulsion and undue influence, and was right in withdrawing from the contract. The deed was executed by A who was unwilling, under undue influence, forcefully and under compulsion. A has the right to refuse to perform the deed as it violated the terms of a valid contract. (Mahboob Khan And Ors. vs Hakim Abdul Rahim AIR 1964 Raj 250)
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In this Question, the problem consists of a set of rules and facts. Apply the specified rules to the set of facts and answer the question.
Rules
A. The act of using threats to force another person to enter into a contract is called coercion.
B. The act of using influence on another and taking undue advantage of that person is called undue influence.
C. In order to prove coercion, the existence of the use of threat, in any form and manner, is necessary. If coercion is proved, the person who has been so threatened can refuse to abide by the contract.
D. In order to prove undue-influence, there has to be a pre-existing relationship between the parties to a contract. The relationship has to be of such a nature that one is in a position to influence the other. If it is proven that there has been undue influence, the party who has been so influenced need not enforce the contract or perform his obligations under the contract.
Facts:
Aadil and Baalu are best friends. Aadil is the son of a multi-millionaire business person, Chulbal who owns Maakhan Pharmaceuticals. Baalu is the son of a bank employee, Dhanraj. One day, Aadil is abducted from his office by Baalu. Chulbul receives a phone call from Dhamaj telling him that if he does not make Baalu the CEO of NIaakhan Pharmaceuticals, Aadil will be killed. Chulbul reluctantly agrees to make the Baalu the CEO. Subsequently, Chulbul and Baalu sign an employment contract. However, as soon as Aadil is released and safely returns home, Chulbul tells Baala that he shall not enforce the employment contract. Baalu and Dhanraj are not sure as to what is to be done next.
In the above fact situation:
Choose the best option for the following statement:
The distinction between fraud and misrepresentation:
1. Fraud is more or less intentional wrong, whereas misrepresentation may be quite innocent.
2. In addition to rendering the contract voidable, iS a cause of action in tort for damages. Simple misrepresentation is not a tort but a person who rightfully rescinds a contract is entitled to compensation for any damages which he has sustained through the non-fulfillment of the contract.
3. A person complaining of misrepresentation can be met with the defence that he had "the means of discovering the truth with ordinary diligence. But excepting fraud by silence in other cases of fraud it is no defence that "the plaintiff had the means of discovering the truth by ordinary diligence".
4. None of the above.
The Contract Act of 1872 was enacted on
The Indian Contract Act came into force on:
.................. is forbidden by law.
A contract is defined as an agreement enforceable by law, vide Section ____ of the Indian Contract Act.
Every agreement and promise enforceable by law is ................
A contract in which, under the terms of a contract, one or both the parties have still to perform their obligations in the future is known as
From the four answers given, Choose the appropriate answer.
All motor vehicles are required to have third party insurance. Any vehicle not using a mechanical device is not a motor vehicle.
Which of the following is a correct derivation from the above?
From the four answers given, shade the appropriate answer.
A contract contravening public policy is void. There cannot be a general definition of public policy. Which of the following is a correct derivation from the above?
