Essay: Indian Contracts law

According to the Indian Contracts Act 1972, an essential feature of a valid contract is the consent of the parties involved. Section 13 of the Indian Contracts Act 1972 defines consent as ““Two or more persons are said to consent when they agree upon the same thing in the same sense”. That is to say, there should exist consensus ad idem or in other words, parties privy to the contract should have identity of mind with regards to the objective of the contract. Moreover the consent of the parties involved must also be voluntary in nature . Free consent is a prerequisite for a contract to be valid and it can be defined as a form of consent which has been obtained by the free will of the parties out of their own accord. Section 14 of the Act defines free consent as consent which has not been obtained by exercising either of the following–Coercion, Undue influence, Fraud, Misrepresentation or Mistake.
Coercion: According to Indian Contracts Act 1872, coercion is said to be employed when a person is compelled to enter into a contract by the other party through the application of force or under a grave threat. Section 15 of the Indian Contracts Act 1872 defines coercion to be an act which involves the committing or threatening to commit any act forbidden by the Indian Penal Code 1860 or the unlawful detaining or threatening to detain any property of any person with the intention of forcefully obtaining the consent of any person to enter into an agreement. It is also to be noted that this section states that it is immaterial whether the Indian Penal Code was or was not in force at the place where the coercion was employed. Thus, consent is said to be obtained by coercion when force is exerted on the aggrieved party by either of the following techniques-
Committing or threatening to commit any act forbidden by the Indian Penal Code.
Trespassing on burial places : In the leading case of Ranganayakamma V Alwar Settey a young girl of 13 years was compelled by the relatives of her recently deceased husband to adopt a boy by preventing the removal of his body for cremation until she consented to it. It was held that the adoption was not binding on her as her consent was obtained under coercion within the meaning of section 15 of the Indian Contracts Act 1872 since any person who obstructs a dead body from being removed would be guilty of the offence of trespassing on burial places under section 297 of the IPC. Consequently, the adoption was dismissed by the court.
Unlawfully detaining or threatening to detain any property-
In the case of Muthia Chetti And Ors. Vs Muthu Karuppa ,an agent had threatened to not hand over the account books of a business to the new agent unless the principal released him from all sorts of impending liabilities. Consequently, the principal had to give in to the demand and sanctioned a release deed for the same. It was held that since the release deed was given under coercion , it was voidable at the option of the principal.
In English law, the near equivalent of the offence of ‘coercion’ is the offence of ‘duress’. Duress involves illegal imprisonment or either actual or threatened violence over the contracting party (or his family) with an objective of obtaining consent to the agreement. However, if the threat is with regards to goods or property, it does not fall under the scope of duress. Thus, the offence of coercion under the Indian Contracts Act 1872 has a wider scope of implementation compared to the offence of duress as the former involves both persons and property, whereas the latter is restricted to persons only.
Remedy available :
According to Section 19 of the Indian Contracts Act 1872, a contract which has been brought into effect by coercion is voidable at the option of the aggrieved party whose consent was compromised. This means that the aggrieved party shall either exercise the option of affirming the transaction and hold the other party bound by it or repudiate the transaction by exercising a right of rescission. As per Section 64 of the Indian Contracts Act 1872, if the aggrieved party chooses to rescind a voidable contract, he must restore any benefit received by him under the contract to the other party from whom it was received. The burden of proof that coercion was employed lies on the party who wants to dismiss the contract on the plea of coercion. Although the primary objective of contract law is restitution which involves ensuring that the aggrieved party is able to regain the position he was in before the signing of the contract, in reality it is hardly achieved. This is because a party who has been a victim of coercion often undergoes severe mental trauma which can never be duly compensated merely through monetary means. It is essential that new laws are framed in this regard to ensure efficient delivery of justice.