Coercion

Coercion. as an component of duress. is evidences for seeking the cancellation of a contract or title. When one party to an instrument is forced against his or her will to hold to its footings the papers can be declared null by a tribunal.

In order words. a contract merely be adhering if both of the parties voluntarily consent to it. The consent should be invalid of one party is forced to accept by menaces or under persuasion by the other. As defined in subdivision 15 of the Contracts Act. one signifier of such menaces is ‘coercion’ and for the intents of subdivision 14 ( as discussed in parity 2. 1 ) which. among others. necessitate ‘free consent’ of undertaking parties. The subdivision goes on to supply that consent is free when it is non caused by ‘coercion’ as defined by subdivision 15. or others such as ‘undue influence. fraud. deceit and mistake’ .

Section related to coercion
The relevant portion of subdivision 15 reads as follows: –

‘Coercion’ is the committing. or endangering to perpetrate any act forbidden by the Penal Code. or the improper detaining or endangering to confine. any belongings. to the bias of any individual whatever. with the purpose of
doing any individual to come in into an understanding.

Illustration

The illustration of coercion as per followers:
A. on board an English ship on the high seas. causes B to come in into an understanding by an act amounting to condemnable bullying under the Penal Code. A afterwards sues B for breach of contract at Taiping.

A has employed coercion. although his act is non an offense by the jurisprudence of England. and although subdivision 506 of the Penal Code was non in force at the clip when or topographic point where the act was done.

Sample Cases for coercion
Case 1

Lord Moulton in Kanhaya Lal v. National Bank of India Ltd. an entreaty to the Privy Council from India on a proviso in pari materia with the local Act. opined that the definition of ‘coercion’ was entirely a definition which applied ‘to the consideration whether there has been ‘free consent’ to an understanding so as to render it a contract’ . This means that the definition of ‘coercion’ under subdivision 15 applies entirely to the consideration whether there has been free consent to an understanding so as to render it a contract under subdivision 10 of the Contracts Act.

The definition of ‘coercion’ covered duress at common jurisprudence which has traditionally meant existent force or menaces of force to the individual of the undertaking party or person near to that individual. The common jurisprudence of duress relates to the improper menace to confine goods is a small ill-defined although it has been held that money paid to let go of goods unlawfully detained is recoverable.

In any instance. its importance is greatly lessened visible radiation of the broad definition of coercion under the Contracts Act which includes ‘the improper detaining or endangering to confine any belongings. to the bias of any individual whatever. In Kanhaya Lal instance. the Privy Council ruled that the complainant was entitled to retrieve money paid as a effect of coercion caused by the unlawful intervention of the defendant bank with belongings.

Case 2

“Duress” was applied in Kesarmal s/o Letchman Das V Valiappa Chettiar. where the tribunal held invalid as it is a transportation executed under the orders of grand Turk. issued in baleful presence of two Nipponese officers during the Nipponese Occupation of Malaya was invalid. In this instance. was non given freely and the understanding was rescindable at the will or option of the party whose consent was so caused.

Case 3

In Chin Nam Bee Development Sdn. Bhd. v. Tai Kim Choo & A ; 4 Ors. the respondents purchased places off the program to be constructed by the plaintiff in errors. Each of the respondents had signed a sale and purchase understanding to buy a house at $ 29. 500. Subsequently. the respondent was made to pay extra of $ 4. 000. The tribunal was asked to find if the extra payment was made voluntarily or under menace by the complainants to call off the respondents’ booking for their houses.

The lower tribunal had found that payment was non voluntary but had been made under menace. The entreaty was dismissed by the High Court which ruled that there was coercion as defined in subdivision 15 of the Contracts Act. It further added that the definition in subdivision 15 should merely use for the intent contained in subdivision 14. and non for the full Act. Given this reading. the word ‘coercion’ in subdivision 73 is non restricted to the significance in subdivision 15. and should be given its ordinary and general significance.

UNDUE INFLUENCE

The philosophy of ‘undue influence’ is a development of equity to cover instances of peculiar dealingss and is sometimes used as a comprehensive phrase to include instances of coercion. domination or force per unit area within or without those particular dealingss. This philosophy as embodied in Section 16 of the Contract Act 1950 is in substance based on English rules. Section 16 ( 1 ) reads:

“A contract is said to be induced by ‘undue influence’ where the dealingss existing between the parties are such that one of the parties is in a place to rule the will of the other and uses that place to obtain an unjust advantage over the other. ” Section 16 ( 2 ) reads:

In peculiar and without bias to the generalization of the foregoing rule. a individual is deemed to be in a place to rule the will of another– ( a ) where he holds a existent or evident authorization over the other. or where he stands in a fiducial relation to the other ; or ( B ) where he makes a contract with a individual whose mental capacity is temporarily or for good affected by ground of age. unwellness. or mental or bodily hurt. Section 16 ( 3 ) reads:

( a ) Where a individual who is in a place to rule the will of another. enters into a contract with him. and the dealing appears. on the face of it or on the grounds adduced. to be conscienceless. the load of turn outing that the contract was non induced by undue influence shall lie upon the individual in a place to rule the will of the other. ( B ) Nothing in this subdivision shall impact subdivision 111 of the Evidence Act 1950 [ Act 56 ] .

Illustration

( a ) A holding advanced money to his boy. B. during his minority. upon B’s coming of age. obtains. by abuse of parental influence. a bond from B for a greater sum than the amount due in regard of the progress. A employs undue influence. ( B ) A. a adult male enfeebled by disease or age. is induced. by B’s influence over him as his medical attender. to hold to pay B an unreasonable amount for his professional services.

B employs undue influence. ( degree Celsius ) A. being in debt to B. the usurer of his small town. contracts a fresh loan on footings which appear to be conscienceless. It lies on B to turn out that the contract was non induced by undue influence. ( vitamin D ) A applies to a banker for a loan at a clip when there is tightness in the money market. The banker declines to do the loan except at an remarkably high rate of involvement. A accepts the loan on these footings. This is a dealing in the ordinary class of concern. and the contract is non induced by undue influence.

Bank of China v Maria Chia Sook Lan

In Bank of China v Maria Chia Sook Lan. the respondent who had charged her belongings for installations given to her hubby for his concern contended that the bank had procured the executing of the warrant by her by undue influence.

It was alleged that the bank moving through its retainer had threatened her. The facts that were relied upon were the statements made by the bank officer:

( a ) Pressing her in her husband’s absence to give a farther warrant of his history ;
( B ) Threatening that. if she did non give the warrant. the bank would sell her portions held as security for her overdraft
( degree Celsius ) Endangering that. if she did non give the warrant. the bank would do her hubby insolvent.

It was conceded for the surety that although the bank was entitled to do him ruin. the menace to make so established undue influence. The tribunal took the position that sing the facts associating to the warrant. Madam Chia had failed to set up undue influence. Of class this is non to state that a menace can ne’er amount to undue influence.

Williams V Bayle involved a instance where a boy sent to bankers promissory notes with his father’s name on them as subscriber. The bankers insisted. without any direct menace of a prosecution. on a colony to which the male parent was to be a party. He consented and executed an understanding to do an just mortgage of his belongings. It was held where a male parent takes upon himself a civil liability with the cognition that unless he does so. his boy will be exposed to a condemnable prosecution. is non a free and voluntary agent and the understanding he makes under such fortunes is non enforceable in equity.

Apart from the general commissariats and rules associating to undue influence the Contracts Act 1950 specifically sets out state of affairss where a individual is deemed to be in a place to rule the will of another. These are:

( a ) where he holds a existent or evident authorization over the other. or where he stands in a fiducial relation to the other

( B ) where he makes a contract with a individual whose mental capacity is temporarily or for good affected by ground of age. unwellness. or mental or bodily hurt.

The consequence of these judicial admissions is that where it can be established to back up this given so it is non necessary to travel any farther to set up that such a individual is in a place to rule the will of the other.

However the fact that a individual who is alleged to exert undue influence is in a “deemed position” to rule the will of the other is by itself non plenty to turn out that there has been undue influence. There must be a farther component nowadays.

The dealing must be conscienceless. Once this farther component is established so it will be presumed that the dealing was entered into under undue influence. This is reflected in Section 16 ( 3 ) of the Contracts Act 1950 which reads:

“Where a individual who is in a place to rule the will of another. enters into a contract with him. and the dealing appears. on the face of it or on the grounds adduced. to be conscienceless. the load of turn outing that the contract was non induced by undue influence shall lie upon the individual in a place to rule the will of the other. ”

A consideration of all these is required to set up that undue influence exists. The being of undue influence affects the consent which is a requirement to the being of a valid understanding. Hence Section 20 reads: “When consent to an understanding is caused by undue influence. the understanding is a contract rescindable at the option of the party whose consent was so caused. Any such contract may be set aside either perfectly or. if the party who was entitled to avoid it has received any benefit there under. upon such footings and conditions as to the tribunal may look merely. ”

Where there is no undue influence. facets such as deceit. fraud or coercion may corrupt an otherwise valid understanding.

Inche Noriah V Shaik Allie Bin Omar ( 1929 ) AC 127 ; 1 MC 79
Facts:

* An old lady ( nonreader ) executed a title of gift of a landed belongings in S’pore in favor of her nephew who had been pull offing her personal businesss. * Before put to deathing the title. the giver had independent advice from a attorney who acted in good religion. * However. he was incognizant that the gift constituted practically the whole of her belongings and did non affect upon her that she could providentially and every bit have benefited the beneficiary by confering the belongings upon him by a will. Keep:

* The gift should be set aside as the given of undue influence. which is raised by the relationship proved to hold been in being between the parties. was non rebutted The consequence of undue influence is to render the contract rescindable at the option of the guiltless party. He can retrieve his losingss under subdivision 66 of the Contract Act 1950 which requires a individual who has received any advantage under the contract. before it becomes null. to reconstruct it to the party whom it was received

Fraud

Harmonizing to Section 17 of the Contracts Act 1950. fraud is defined as certain Acts of the Apostless which are committed with the purpose to bring on another party to come in into a contract. In other words. it means an act which is done with the purpose to lead on another party. As a general regulation. when a individual causes another individual to move on a false representation which the shaper himself does non believe to be true. he is said to hold committed a fraud. Section 17 reads:

a. the suggestion. as to a fact. of that which is non true by one who does non believe it to be true. b. the active privacy of a fact by one holding cognition or belief of the fact. c. a promise made without any purpose of executing it. d. any other act fitted to lead on ande. any such act or skip as the jurisprudence specially declares tobe fraudulent.

An understanding made on the footing of fraud is a rescindable contract. Section 19 ( 1 ) of the Contracts Act 1950 provides that when consent to an understanding is caused by coercion. fraud or deceit. the understanding is a contract rescindable at the option of the party whose consent was so caused.

Mere silence as to facts likely to impact the willingness of a individual to come in into a contract is non fraud. unless the fortunes of the instance are such that. see being had to them. it is the responsibility of the individual maintaining silence to talk. or unless his silence is. in itself. equivalent to speech.

Illustration

( a ) A sells by auction. to B. a Equus caballus which A knows to be unsound. A says nil to B about the horse’s unsoundness. This is non fraud in A. ( B ) B is A’s girl and has merely come of age. Here. the relation between the parties would do it A’s responsibility to state B if the Equus caballus is unsound. ( degree Celsius ) B says to A. “If you do non deny it. I shall presume that the Equus caballus is sound. ” A says nil. Here. A’s silence is tantamount to speech. ( vitamin D ) A and B. being bargainers. enter upon a contract. A has private information of a alteration in monetary values which would impact B’s willingness to continue with the contract. A is non bound to inform B.

Cases

Weber v. Brown:

The respondent sued the plaintiff in error for amendss in regard of an alleged false and deceitful deceit associating to the figure of gum elastic trees on an estate.

Held: The appellant’s statement that he counted the trees taken in concurrence with the written enumerated of trees amounted to fraud. The tribunal besides agreed that the representation made by the suspect had clearly induced the complainant to exert the right to buy.

Misrepresentation

Misrepresentation is defined in the Section 18 of the Contract Act 1950 as: ( a ) The positive averment. in a mode non warranted by the information of the individual doing it. of that which is non true. though he believes it to be true. ( B ) Any breach of responsibility which. without an purpose to lead on. gives an advantage to the individual perpetrating it. or anyone claiming under him by misdirecting another to his bias. or to the bias of anyone claiming under him. and ( degree Celsius ) Causing. nevertheless innocently. a party to an understanding to do a error as to the substance of the thing which is the topic of the understanding.

A deceit is a false statement of fact or jurisprudence which induces the representee to come in a contract. Where a statement made during the class of dialogues is classed as a representation instead than a term an action for deceit may be available where the statement turns out to be untrue. There are three types of deceit: guiltless deceit. negligent deceit and deceitful deceit. The consequence of a determination of deceit is the contract is rescindable. or the contract exists but may be set aside by the representee.

The redress available depends on the type of deceit. but by and large consists of recission and or amendss. The right to revoke the contract may be lost in some fortunes. The basic difference between deceit and fraud is that the individual doing the representation may believe in its truth whereas. in instances of fraud. the individual who doing the presentation does non believe in its truth at all. As the instance of fraud. silence in certain state of affairs where there is a responsibility imposed to unwrap. may amount to a deceit as stated in subdivision 18 ( B ) .

Principal related

There are 2 chief rules. One of it is the principal of the right of undertaking party to stay soundless. even cognizing that the determination of other party may be affected. The principal related is the first portion of Section 17 which stated ‘mere silence as to facts likely to impact the willingness of a individual to come in into a contract is non fraud…’ Illustration ( a ) and ( vitamin D ) will explicate this: ( a ) A sells. by auction. to B. a cow which A knows to be unsound. A says nil to B about the cow’s unsoundness. This is non fraud in A.

( B ) A and B. being bargainers. enter upon a contract. A has private information of a alteration in monetary values which would impact B’s willingness to continue to the contract. A is non bound to B. For the other principal is the utmost. certain fortunes that need a party to unwrap information to each other. else the contract is rescindable at the option of the guiltless party. This principal is from the Section 17 which reads ‘…unless the fortunes of the instance are such that. see being had to them. it is the responsibility of the individual maintaining silence to talk. or unless his silence is. in itself. equivalent to speech’ . This regulation can be farther explain in inside informations by illustrations ( B ) and ( degree Celsius ) based on the sale of a Equus caballus in assorted fortunes.

( a ) B is A’s girl and has merely come of age. Here. the relation between the parties would wish it A’s responsibility to state B if the Equus caballus is sound.

( B ) B says to A. ‘If you do non deny it. I shall presume that the Equus caballus is sound. ’ A says nil. Here. A’s silence is tantamount to speech. In add-on. Section 18 ( B ) province that in peculiar that deceit occurs if there is any breach of responsibility.

Cases related
1. Weber v. Brown supra

The plaintiff-respondent sued the defendant-appellant for amendss in regard of an alleged false and deceitful deceit associating to the figure of gum elastic trees on an estate over which the latter had the right of purchase. which right he transferred for the valuable consideration to the former. Held: The appellant’s statement that he counted the trees taken in concurrence with the written enumerated of trees amounted to fraud. The tribunal besides agreed that the representation made by the suspect had clearly induced the complainant to exert the right to buy.

2. ChooiLeng v. Public Life Co. Ltd

The suspect company in consideration of premiums paid and to be paid by the assured. since deceased. agreed to see his life for $ 10. 000. Upon cogent evidence of his decease. they agreed to pay the said amount. The assured died and the complainant. to whom the policy was assigned filed an action for non-payment. The defendant’s instance was that the contract was rescindable and that they were non apt because the declaration by the assured. on the religion of which the policy was issued. contained false statements. deceits and privacy and suppression of the truth.

There was medical grounds that the assured had been treated for pneumonic TB. But in his declaration. when using for the insurance. in reply to the inquiry: ’have you of all time had advice about your bosom or lung or for cough? ’ he said ‘No’ Held: The reply was a calculated prevarication and the contract was hence rescindable. Gill J ( inquire he so was ) said. ‘it is banal jurisprudence that a contract of insurance is a contract uberrimaefidei which can be avoided for non-disclosure of material facts.