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Question

Given below is a statement of legal principle followed by factual situation. Apply the principle to the facts and select the most appropriate answer.
Principle: An agreement becomes a contract when it is entered into between two or more people with each other's free consent. Two or more people are said to consent when they agree to the same thing in the same sence. Consent is said to be free when it is not caused by coercion, undue influence, fraud, misrepresentation or mistake.
A went to a doctor to get himself treated. The doctor asked him to sign a "consent form" and said that unless he signs it, he will not examine him. A signed the form waiving his right to sue the doctor.

A
This is a valid contract since A understood and consented to the terms
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B
This is not a valid contract since A had not other option, but to sign
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C
This is a valid contract since it is a doctor-patient relationship
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D
None of the above
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Solution

The correct option is A This is a valid contract since A understood and consented to the terms
In this case no force or compulsion was used. The doctor only provided the consent form. So it is a valid contract. Therefore option (a) is correct.

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Q. 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.
Whether the consent to offer the flat as financial security obtained through undue influence?
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