File Copyright Online - File mutual Divorce in Delhi - Online Legal Advice - Lawyers in India

Duress v. Coercion in law of Contract

If we look into the terminology duress it is often stated that it is same as coercion were as some differ to the statement. When we refer to different law books and cases, we find that they both are similar to some extent but also differ as they have different elements and are different when a situation occurs.

According to the Black's law dictionary duress is defined as strictly, the physical confinement of a person or threatened use of unlawful force used against a contracting party- that a reasonable man cannot resist is called a duress.[1] Whereas, coercion is defined as compulsion of a free agent by physical moral or economic force or threat of physical force.[2]

According to our country, it is said that the Indian Law calls coercion to what English law states it as duress or menace. But as per the definitions, as stated above, if we see the elements present in duress is a bit different from what is present in coercion. According to the law of contract in India, the word ‘duress' is not used rather the term ‘coercion' is used. Even if it is said that duress is one of the components of coercion then why it is not mentioned in the Indian Contract Act?
To answer such questions, this article is an attempt to make a clear difference between coercion and duress keeping in view English and Indian law and discuss the evolution of both with the passing of time.

Coercion in Indian Law

Under the law of contract, if we differentiate duress and coercion, they both stand different. If we read Section 15 which defines coercion as:
coercion is the committing, or threatening to commit, any act is forbidden by The Indian Penal Code 1860, or the unlawful detaining, or threatening to detain, any property, to the prejudice of any person whatever, with the intention of causing any person to enter into an agreement.[1] The elements that the definition carries which are important to state that the coercion has been caused are:
  1. Committing or threatening to commit, act forbidden by the Indian Penal Code 1860.
  2. Unlawful detaining or threatening any property to the prejudice of any person.[2]
Coercion cannot be inferential and the assertion of there being coercion has to be substantiated by evidence.[3] Coercion invalidating a contract need not proceed from a party to the contract or be immediately directed against a person whom it is intended to cause to enter into the contract.[4] To constitute coercion, the threat must be unlawful and it must be shown that it was effected with the intention of coercing the other party to enter into an agreement.[5] If we see The Indian Contract Act 1872, the explanation of Section 15 clearly states that:
it is immaterial whether the Indian Penal Code is or is not in force in the place where the coercion is employed.

that means even though the coercion in The Indian Contract Act is confined to unlawful acts forbidden by any specific penal law i.e The Indian Penal Code, it can also be hence, inferred that coercion here plays a wider role in this sense because it is saying that it's not that important that IPC is in force when coercion is employed and in this way, coercion is not only becoming the part of the Indian Penal Code but also, it is touching the area of The Indian Contract Act.

The burden of proof in cases of coercion:

The one who files the case in the coercion has to fully justify his grounds by mentioning the circumstances. Mere suspicion or mere probability is not sufficient to support a plea of coercion under contract law.[6] The burden of proof that the coercion or any kind of duress has taken place lies completely on the plaintiff by the defendant hugely lies on the part of the plaintiff to prove his grounds. In the absence of the oral evidence or document in support that coercion was caused, the finding that the agreements were not obtained by free consent was held to be an inferential conclusion not supported by any evidence.[7]

Duress in English law

Were as, under English Common-Law, Duress in Contract consists of actual violence or threat of violence to a person. It only includes fear of loss to bodily harm including imprisonment, but not a threat of damage to goods.[8] In English law threat of duress to the person is limited and there should be a threat of personal violence. The threat which is created should be tortious or crime.[9] Moreover, duress must be directed against a party to the contract, or his wife, child, parent or another near relative [10] and also caused by the party to the contract, or within his knowledge.[11] Common law only recognises only a threat to a man's person and not to his goods to constitute duress.

This is different from the Indian law where Section 15 of the Indian contract act recognizes unlawful detention, or a threat to detain property as coercion.[12] In India, in case of coercion not only the contract is voidable under Section 19, but if some money has been paid or well delivered by a party to a contract under coercion, the same is recoverable under Section 72[13] for example (illustration of sec 72 (b)). If a person is disposed off his property under illegal threat that unless he parts with the possession, he would be detained under MISA (Maintenance of Internal Security), parting with the property under such threat amounts to coercion under Section 15.[14]

A contract obtained by means of duress exercised by one party over other is at very least voidable,[15] and not void[16]but if it's voluntarily acted upon by the party entitled to avoid then it will become binding on him.[17]

In a contract the situation, commercial pressure is not enough to state that one has been suffering through duress. The commercial pressure should be such that the victim had to enter into the contract against his will where there was no true consent and it is also material to enquire whether the person alleged to have coerced did or did not protest to the force applied to him: whether he was coerced to enter into the contract and if he had ways to escape through this such as by taking the legal remedy, or whether even after getting into the contract, he took steps to avoid such contract or not. Thus where after considering the matter thoroughly and with a view to avoid litigation, the defendants formed the opinion that the risk in giving the guarantee was more apparent than real, it was held by the Privy Council that though there was commercial pressure, it did not amount to coercion and the guarantee was not void on the ground that it was induced by economic duress on the plaintiff's part.[18]

Economic Duress in India:

According to the Black's Law Dictionary, the term economic duress is defined as, ‘an unlawful coercion to perform by threatening financial injury at a time when one cannot exercise free will- also called as business compulsion.' In our country, the economic coercion falls under Section 16 of the Indian Contract Act which states ‘undue influence' and sets such a situation between the parties in such that one of them is in a position to dominate the will of the other and uses that position to obtain an unfair advantage over the other.[19]

Duress in English Law v. Coercion in Indian Law of Contract
The concept of duress is narrower than the concept of Coercion in India. In India, the threatening to commit an act is forbidden by the Indian Penal Code, ao it can be inferred that it is confined under a specific penal law were as Duress in English law consists of actual violence or threat of violence to a person. An attempt by the Madras High Court has been made in the case of Karuppayee Ammal v. Karrupiah Pilla[20] to compare the two terms.

The court stated that What Indian Law call's Coercion in English law it is stated as Duress or Menace. Duress is said to be caused to the contracting party or his wife/husband, parent, child or relatives but in India, Section 15 of the Contract Act is much wider than the concept of duress and it also includes the unlawful detention of property. In English law, duress must be such as to cause immediate violence and also unnerve a person of ordinary fearlessness of mind, were as these things are not required by Indian law.

In India, an act may be directed against a person or the property in coercion but in English law, it has to be constituted by the acts or threats against the person of a man and not against the property. In India, coercion may proceed from a person who is not a party to the contract and can go to a stranger to the contract were as in English law may proceed from a party to the contract and may also directly run against the party to the contract himself or wife or parent or child or relatives.[21]

Evolution of duress and coercion with time

If we see the coercion in India, the Law Commission has had recommended a to change the language of the section as it stands ‘a threat to commit an offence under any law other than The Penal Code, as it may not amount to coercion. Recognising this, the Law Commission of India recommended then that it should be changed into ‘ act is punishable by any law for the tie being in force' which would provide a wider expression is to include other laws other than The Indian Penal Code.[22]

It was held that an agreement to refer matters in dispute to arbitration entered into doing the pendency and in fear of criminal proceedings could not be avoided on the ground of ‘coercion' though the agreement may be void as opposed to public policy within the meaning Section 23.[23]Refusal to withdrawal a prosecution, unless a bond was executed for the amount due, was not covered by this section[24] nor a threat to strike.[25]

Duress in common law was first confined to the person's actual or threatened violence. The common law required a "wrongful" or "unlawful" act for the next seven centuries before it could provide redress for duress, but it would be relatively less important to be afraid of the victim.

The person's common-law the force has often been assimilated to crime or torture; indeed, these categories have often overlapped, and for that reason, it may not have developed far beyond the narrow scope of threatened personal violence. Victims of more subtle forms of pressure had to seek equitable redress in Chancery, which generally worked to protect people with mental and physical disabilities who were impoverished by the exercise of undue influence.

Equity was involved with guarantees that had been extracted by the unethical or immoral use of a superior dialogue position like was found in confidential or fiduciary relationships, which inhibited the victim's free exercise of his will. The inequity in the equitable the doctrine of pressure was that the victim had been compelled to do what he did not want to do.

Historically, one exception to the common-law rule was that coercion would create a voidable contract when it was induced by threatened personal violence, i.e., commodity coercion. In simple cases of wrongful seizure or detention of personal property, this single, early incursion into the area of economic pressure began in the eighteenth century. In England, there have been no parallel developments.

Instead, English courts devoted their energies to developing an illogical distinction between paying money at the time of the constraint and promising to pay money in the future. In the former case, the victim was given restitution of his money, whereas in the latter case he was ordered to pay the money to his coercer.[26]

As every law needs to change according to the need of the society as discussed above, the duress in English Law should have now a wider perspective and add people other than the victim himself, wife, child, parent and relatives and should add rather, as the victim himself and to the person who is not a party to the contract but is forced to enter with the victim for the same. Also, the Indian law of contract should remove the confinement of Section 15 under the Indian Penal Code and add rather other penal laws also or should follow the recommendation given by the 13th Law Commission of India Report.

End-Notes:
  1. The Indian Contract Act, 1872.
  2. Dr. R.K. Bangia, Indian Contract Act, 116 (15th ed. , reprint, Allahabad Law Agency, Haryana 2017).
  3. State of Kerala V. M .A. Mathai, A.I.R.2007 SC 1537.
  4. Chikkam Ammiraju v. Chakkam Seshamma, A.I.R. 1917 Mad 288
  5. Palaniappa Mudailar v. Kandaswamy Mudaliar, (1971) 1 Mys LJ 258.
  6. Purushottam Daji Mandlik v. Panurang Chitman A.I.R 1915 Bom 68
  7. Sate of Kerala v. M.A. Mathai A.I.R. 2005 SC 1958.
  8. Atlee v. Backhouse, (1838) 3 M & W 633; Skeate v. Beale, (1840) 11 A & E 983.
  9. See Ware and De Freville Ltd. v. Motor Trade Association, (1921)3 K.B. 40
  10. See Sear v.Cohen, (1881) 45L.T. 589
  11. Kesarmal v. Vallaiappa Chettiar, (1954) 1 W.L.R. 380
  12. Dr. R.K Bangia,Indian Contract Act, 119 (15th ed. , reprint, Allahabad Law Agency, Haryana 2017).
  13. Supra at 3.
  14. Dr R. K. Bangia, Indian Contract Act, 120 (15th ed. , reprint, Allahabad Law Agency, Haryana 2017).
  15. Lynch v. Director of Public Prosections of Northern Ireland, 1975 1 All ER 913.
  16. But see Lanham 1966, 29 MLR 615.
  17. Ormes v. Beadel, 1860 2 De GF & J333.
  18. Pao On v. Lau Yiu, 1980 AC 614; Barton v. Armstrong, 1976 AC 104.
  19. Puri Construction Pvt. Ltd. v. Larsen and Turbo Ltd., 2015 SCC Online Del 9126
  20. A.I.R. 1687, 2 MLJ 138
  21. Dr. R. K. Bangia, Indian Contract Act, 118 (15th ed. , reprint, Allahabad Law Agency, Haryana 2017).
  22. The Law Commission of India, THIRTEENTH REPORT ON THE CONSTITUTION, Para 15, (1958)
  23. GobardhanDas v. Jai Kishen Das 1900, ILR 22 All 224.
  24. Rameshwar Marwai v. Upendranath Das, A.I.R. 1926 Cal 455.
  25. Workmen, Appin Tea Estate v. Industrial Tribunal Guhati, A.I.R. 1966 Assam 115.
  26. Rajshree Lohia, Doctrine of Duress, CONTRACT LAW (Feb. 04, 2015) available at https://www.lawctopus.com/academike/doctrine-duress/ (last visited on April 01, 2019)
  27. Black's Law Dictionary, 614 (Bryan A. Garner, 10th ed., St. Paul, MN : Thomson Reuters, 2014)
  28. Id. 315

Law Article in India

Ask A Lawyers

You May Like

Legal Question & Answers



Lawyers in India - Search By City

Copyright Filing
Online Copyright Registration


LawArticles

Section 482 CrPc - Quashing Of FIR: Guid...

Titile

The Inherent power under Section 482 in The Code Of Criminal Procedure, 1973 (37th Chapter of th...

How To File For Mutual Divorce In Delhi

Titile

How To File For Mutual Divorce In Delhi Mutual Consent Divorce is the Simplest Way to Obtain a D...

Whether Caveat Application is legally pe...

Titile

Whether in a criminal proceeding a Caveat Application is legally permissible to be filed as pro...

The Factories Act,1948

Titile

There has been rise of large scale factory/ industry in India in the later half of nineteenth ce...

Constitution of India-Freedom of speech ...

Titile

Explain The Right To Freedom of Speech and Expression Under The Article 19 With The Help of Dec...

Copyright: An important element of Intel...

Titile

The Intellectual Property Rights (IPR) has its own economic value when it puts into any market ...

Lawyers Registration
Lawyers Membership - Get Clients Online


File caveat In Supreme Court Instantly