Duress or Coercion in Contract

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Definition:

Section 15 of the Contract act, defines Coercion as

“Coercion is committing or threatening to commit any act forbidden by Pakistan Penal Code or unlawful detaining or threatening to detain any property, to the prejudice of any person with the intention of causing any person enter into an agreement.”

Scope:

Coercion as defined in Section 15 implies committing or threatening to commit some act, which is contrary to law. It can be pleaded only where the end arrived at was achieved by use of something in the nature of unlawful force, or the threat of unlawful force, against the person or the mind of the contracting party. It needs not to be immediately directed against the person whom, it is intended to coerce to enter into the contract. Where the government in order to realize a fine, due from the son, has attached the property belonging both to the son and the father and the father pays the find in order to save the property from being sold, the payment made by father is under coercion in view of the definition in S. 15 of the act.

Act forbidden by Pakistan Penal Code:

In dealing with a case of coercion the court should decide, whether the alleged act of coercion amounts to an offence under Penal Code?

Detention of property:

Seizure and detention of property even if the person has a colour of right, amounts to unlawful detention of property within the meaning of S. 15. Therefore, where a dismissed agent detains the accounts in order to obtain his release deal; it was held that the release deed was obtained as a result of coercion.

Burden of proof:

Coercion and undue influence burden of prove lies on the person alleging the same.

Nature of contract:

Under section 19 and 19-A of the contract act, an agreement entered into as a result of coercion or undue influence is not void but only voidable at the option of aggrieved party.

Threat of criminal prosecution:

             Mere fact that agreement was entered into under fear of criminal prosecution was not sufficient to avoid the contract on the ground of coercion, and that simply because a creditor threatened his debtor to involve him in a criminal case where there were some balls for the prosecution, the same would not be Coercion.

Coercion. Definition of General application of:

Contract Act being Act to define and amend only certain parts of the law relating to contracts and having never been intended to be exhaustive, definition of word “Coercion” in s. 15 introduced merely for limited purpose of chapter II of Act to have not general application.

Contract. Elements of Coercion, under influence and misrepresentation: Proof:

Where such allegation were pleaded against a contract the same were to be proved in the manner as that of the allegation of fraud. Allegation of coercion, undue influence and misrepresentation were to be proved through strong and independent evidence.

Defence of duress:

Plea taken by the appellants alleged to have availed cash finance facility from the bank that they were subjected to duress in issuing letters acknowledging their debt towards the Bank. Where the nature of the duress was not specified by the appellants either in arguments or earlier in the leave to defend before the banking court and no legal proceedings either civil or criminal were initiated by the appellants to complain about the said duress, the defence of duress was not accepted by High Court and the appeal was dismissed.

Undue  influence in the form of Coercion:

Undue influence can arise even in cases between strangers. Agreement got executed by means of threat of criminal prosecution. When can be said to have been obtained by coercion. [PLD 1962] kar 409.

Act Forbidden by PPC;

A threat to commit suicide in consequence of which a document in executed by a person is a threat and “an act forbidden by PPC” therefore amounts to coercion.

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