Question 3 (a)

Distinctions: coercion and undue influence; wagering agreement and contingent contract; offer and invitation to offer

12 marks

Time to write
About 24 minutes
Topic
Short notes and true or false across several topics
Notes
Crux notes

Question

Question 3 (a) · 12 marks

Distinguish between the following:

  1. Coercion and Undue influence

  2. A wagering agreement and a Contingent Contract

  3. An offer and an Invitation to offer (3×4=12)

Reworded from the university paper; the task is the same. The original paper belongs to the University of Delhi. See DU's question bank.

Before you write

Read off the question and its marks

24 minfor 12 marks

Read from the question

  • (3×4=12)3 items at 4 marks each: give each its share.
  • Distinguish betweenSet the differences out in a table, basis by basis, not as two separate essays.

Write it in this order

The parts stand alone: start with the one you are surest of.

  1. Read; underline the asks; jot your points 2 min
  2. 1 (i) Coercion and undue influence 4 marks 7 min
  3. 2 (ii) Wagering agreement and contingent contract 4 marks 7 min
  4. 3 (iii) Offer and invitation to offer 4 marks 6 min
  5. Check: every ask answered, key terms underlined 2 min

Short on time? A few lines on every part beat a full answer to one: each part is capped at its own marks.

Try it first. About 24 minutes for 12 marks. Write it out, then open the solution.

Solution

Hover or tap a marked figure, like 72,000, to see how it is made and where else it appears.

(i) Coercion and undue influence

Coercion (s. 15) is committing, or threatening to commit, an act forbidden by the Indian Penal Code, or unlawfully detaining any property or threatening to do so, to the prejudice of any person, with the intention of making any person enter into an agreement. Undue influence (s. 16) exists where one party is in a position to dominate the other's will and uses that position to gain an unfair advantage over him. A contract caused by either is voidable, not void.

Picture itDistinctions: coercion and undue influence; wagering agreement and contingent contract; offer and invitation to offer

1A raised lathi over the counter: the signature it forces is coercion.

CoercionCommitting, or threatening to commit, an act that the Indian Penal Code forbids

2At the sickbed, the nephew guides the trembling pen—position used, will dominated.

Undue influenceTo dominate the will of the other and uses that position to obtain an unfair advantage over

3Either way, the paper is the victim's to tear—voidable at his choice, not void on its own.

VoidableSuch a contract is voidable, not void.

BasisCoercionUndue influence
Nature of the pressureA criminal act or unlawful detention of property, or a threat of eitherMisuse of a dominating position over the other's mind; no crime is needed
Relationship between the partiesNot requiredSome relationship between them is essential
Who exerts it, and on whomNeed not come from the promisor or be aimed at him; even a stranger to the contract may use itAlways exercised between the parties to the contract
Court's powersContract voidable at the option of the party coercedVoidable; alternatively the court may annul it, or uphold it with modifications
Benefit receivedOn rescission, any benefit received must be restored (s. 64)The court may order the benefit returned in whole, in part, or not at all

Example: a buyer who signs a sale deed after the seller's men threaten to set fire to his shop acts under coercion; an elderly patient persuaded by her doctor to sign over her flat to him at a fraction of its value acts under undue influence.

(ii) Wagering agreement and contingent contract

A contingent contract (s. 31) is a contract to do or not to do something depending on whether an event collateral to the contract happens or does not happen. A wagering agreement is a promise to give money or money's worth depending on whether an uncertain event happens or not. Wagers are void under section 30, and no suit lies to recover what is said to have been won on a wager, or what was handed to a person to hold until the result of the game or other uncertain event is known.

BasisWagering agreementContingent contract
PromisesConsists of reciprocal promises: each side stands to win or loseNeed not contain reciprocal promises
The uncertain eventIs the very core of the agreementIs collateral to the contract
Interest of the partiesNone in the subject matter; only the stakeThe parties have an interest in the subject matter
Gain and lossPurely a game of winning and losingNot based on one side's gain being the other's loss
Relation between the twoEvery wager is contingent in natureA contingent contract need not be a wager
EffectVoid (s. 30)Valid

Example: two friends who promise each other ₹2,000 on the result of an IPL final make a wager; a warehouse owner whose insurer promises to pay ₹20 lakh if the stock is destroyed by fire has a contingent contract.

(iii) Offer and invitation to offer

An offer under section 2(a) is a final expression of willingness to be bound as soon as the other party accepts. An invitation to offer proposes terms on which a person is willing to negotiate and asks others to make offers on them; it comes before any offer. The test is the intention with which the statement is made: to be bound on acceptance (an offer), or to do something more before being bound (an invitation).

BasisOfferInvitation to offer
MeaningFinal willingness to be bound on acceptanceTerms on which a person is willing to negotiate; it asks for offers
IntentionTo be bound once the other acceptsOnly to negotiate
Effect of a replyAcceptance turns it into a contractA positive reply is itself only an offer; no contract results
SequenceFollows an invitation, if there was oneAlways comes before an offer
ExamplesA firm's letter offering a named buyer 500 cartons at a stated priceA bare statement of price, an advertisement of goods for sale or houses to let, an auction notice, a quotation sent in reply to a price enquiry

Example: a café's menu card invites customers to order; the customer's order is the offer, and the café accepts it by taking the order.

Where the 12 marks sit

#ComponentMarks
1(i) Coercion and undue influence4
2(ii) Wagering agreement and contingent contract4
3(iii) Offer and invitation to offer4
Total12
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