Given below is a statement of legal principle followed by a factual situation. Apply the principle to the facts given below and select the most appropriate answer.
Legal Principle: Contract is an agreement freely entered into between the parties. But when consent to an agreement is obtained to undue influence, the contract is voidable at the option of the party whose consent was so obtained.
Factual Situation: The pragya had been worked for a business man Anurag since the age of 18, working for a range of Anurag's businesses. In 2000, (aged 21) Pragya purchased a flat. In 2005, Mr. Anurag's business was facing financial difficulties, and he asked Pragya to offe up her flat as financial security against an overdraft facility for the business. In July of that year, the banks solicitors wrote to Pragya, advising that she should take Independent legal advice before putting her property up as a security for the debt. The bank also notified Pragya that the guarantee was unlimited in both time and financial amount. Having discussed the arrangement with Anurag, Pragya was unaware of the extent of the borrowing, but was assured that her mortgage would not be called upon, and that his own properties which were also used as security would be looked at first. A charge was executed over the Pragya's property in August 2005. In 2009, Mr.s Anurag's business went into liquidation and the bank formally demanded Rs.60,24,912 from Pragya. Pragya raised the defence of undue influence - stating that Mr. Anurag had induced her to enter into the agreement, and the bank had full knowledge/ notice of this undue influence which should set aside the banks right to enforce the debt recovery against Pragya. Bank is contending that there is no undue influence.
Legal Principle:
1. Negligence is the absence of care on the part of one party which results in some damage to the other Party.
2. Generally, a person is under no duty to control another to prevent his doing damage to a third Party.
3. The foreseeability test basically asks whether the person causing the injury should have reasonably foreseen the general consequences that would result because of his or her conduct.
4. Statutory authority implies that an act is done by a person to fulfil his duty imposed by the State. Statutory authority is a valid defence under the law of torts.
Factual Situation: Ten borstal trainees were working on an island in a harbour in the custody and under the control of three officers. During the night, seven of them escaped. It was claimed that at the time of the escape the officers lady retired to bed. The seven got on board a yacht, moored off the island and set it in motion. They collided with another yacht, the property of X and damaged it. X sued the Home office for the amount of the damage. Decide whether on the facts pleaded in the statement of claim the Home Office, its servants or agents owed any duty of care to X capable of giving rise to a liability in damages with respect to the detention of persons undergoing sentences of borstal traning or with respect to the manner in which such persons were treated, employed, disciplined, controlled or supervised whilst undergoing such sentences.