Principle If a party to a contract agrees to it under undue influence of any other party then the pa...........

Indian Contract Act (ICA)1872 Valid and Void Contracts

Principle: If a party to a contract agrees to it under undue influence of any other party then the party under the undue influence may refuse to perform in accordance with the agreement.

Facts: A, a rich youngster became a member of a religious group and soon he was appointed by P the head of the group as his personal secretary. As per the rules of the group, all officials and staff of the group were supposed to stay in the group’s official premises itself. Some days later, A was asked by P to execute a Gift deed in favour of P, in which it was mentioned that all immovable properties in his name are being gifted to P. A was unwilling to execute the deed, but he was forcefully restrained by P and his body guards in P’s office and made A sign the gift deed. Soon after this A left the group and refused to hand over the property as agreed to in the gift deed. Is A’s action valid?

A executed the deed, under compulsion and undue influence, and was right in withdrawing from the contract.

It is illegal for religious groups acquire property from its members.

As the gift deed was executed by A, he cannot refuse.

As Gift is also a contract, the consent of A was not obtained by P while executing the deed.

Explanation:

Free consent is an essential ingredient for entering into a valid agreement as per the Indian Contract Act, 1872. Undue influence, coercion, fraud, misrepresentation and mistake tend to interfere with the free consent of a party to a contract. A executed the Gift deed in favour of P because he was forced to do so, hence A has the right to withdraw from the contract.