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 multi millionaire business person, Chulbul 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 Dhanraj telling him that if he does not make Baalu the CEO of Maakhan 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 Baalu that he shall not enforce the employment contract. Baalu and Dhanraj are not sure as to what is to be done next.
Baalu will succeed in getting the employment contract enforced if he can show that

He is the best friend of Aadil

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It was his father, and not he, who used coercion against Chulbul

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Chulbul has promised his father to employ him

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None of the above

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Solution

The correct option is D None of the above
Rule A provides that the person who is threatened can refuse to enforce the contract only on the ground that Dhanraj has used coercion against him. Innocence of Baalu is not a ground to enforce it.

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Similar questions

Q. Legal Priinciples
Rules:
A. The act of using threat 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 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 obligation, under the contract.

Facts:

Aadil and Baalu are best friends. Aadil is the son of a multi-millionaire businessman, Chullbul, 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 Dhanraj telling him that if he does not make Baalu the CEO of Maakhan Pharmaceutical, Aadil will be killed. Chulbul reluctantly agrees to make Baalu the CEO. Subsequently, Chulbul and Baalu sign an employment contract. However , as soon as Aadil is released and safely returns home, Chulbul tells Baalu that he shall not enforce the employment contract. Baalu and Dhanraj are not sure to what is to be done next.
Baalu will succeed in getting the employment contract enforced if he can show that ____________________.

Q. Legal Principle:
1. The act of using influence on another and taking undue advantage of that person is called undue influence.
2. 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 so influenced need not enforce the contract or perform his obligations under the contract.

Factual Situation: A, advances a sum of money to his son, B during his minority. When B becomes major, A by misusing his parental influence, gets a bond from B, of an amount more than the amount due. B refuses to give the amount stated in the bond.
Issue: Is B bound by the bond?

Q. Principle: Two or more persons are said to consent if they agree upon the same thing in the same sense. Consent is said to be free when it is not caused by coercion, on undue influence, or fraud, or misrepresentation, or mistake.
When consent to an agreement is caused by coercion, undue influence, fraud or misrepresentation, the agreement is a contract voidable (rescindable or terminable) at the option of the party whose consent was so caused. However, when consent to an agreement is caused by mistake as to a matter of fact essential to the agreement, the agreement is void.
Fact: 'X' threatens to gun down 'Y' if he ('Y') does not sell his property worth

R s . 2000000

for

R s . 100000

only. As a consequence, 'Y' agrees to sell it as demanded by 'X'.
Which of the following derivations is correct?

Q. Legal Principle: The act of using influence on another and taking undue advantage of that person is called undue influence.

Factual Situation: A borrowed Rs.50,000 at 12 percent per annum interest from B repayable on demand. B made the demand and on failure of A to pay, he was about to sue A to get back his money. A requested B to take interest at the rate of 18 per cent per annum. On refusal to pay interest at 18 percent, by A,B filed a suit.

Issue: Whether B will succeed in his suit?

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: Pragya had been worked for a businessman 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 offer up her flat as a financial security against an overdraft facility for the business. In July of that year, the bank's 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

R s . 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.
Irrespective of your answer, assume it is a case of undue influence. Decide whether the bank has done enough to allay concerns of undue influence?

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The correct option is D None of the aboveRule A provides that the person who is threatened can refuse to enforce the contract only on the ground that Dhanraj has used coercion against him. Innocence of Baalu is not a ground to enforce it.

The correct option is D None of the above
Rule A provides that the person who is threatened can refuse to enforce the contract only on the ground that Dhanraj has used coercion against him. Innocence of Baalu is not a ground to enforce it.