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Question
In this Question, the problem consists of a set of rules and facts. Apply the specified rules to the set of facts and answer the question.
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 a multi-millionaire business person, Chulbal 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 Dhamaj telling him that if he does not make Baalu the CEO of NIaakhan 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 Baala that he shall not enforce the employment contract. Baalu and Dhanraj are not sure as to what is to be done next.
In the above fact situation:
Options
There is undue influence exercised by Dhanraj on Baalu
There is undue influence exercised by Aadil on Chulbul
There is no undue influence
None of the above
Solution
There is no undue influence
Explanation:
There is no undue influence in the given case since the pre-condition of the relationship between Dhanraj and Chulbul is not satisfied. See Sec. 16 of the Indian Contract Act, 1872.
