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
- Notes
- Crux notes
Question
Question 3 (a) · 12 marksDistinguish between the following:
Coercion and Undue influence
A wagering agreement and a Contingent Contract
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
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.
- Read; underline the asks; jot your points 2 min
- 1 (i) Coercion and undue influence 4 marks 7 min
- 2 (ii) Wagering agreement and contingent contract 4 marks 7 min
- 3 (iii) Offer and invitation to offer 4 marks 6 min
- 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.
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.
| Basis | Coercion | Undue influence |
|---|---|---|
| Nature of the pressure | A criminal act or unlawful detention of property, or a threat of either | Misuse of a dominating position over the other's mind; no crime is needed |
| Relationship between the parties | Not required | Some relationship between them is essential |
| Who exerts it, and on whom | Need not come from the promisor or be aimed at him; even a stranger to the contract may use it | Always exercised between the parties to the contract |
| Court's powers | Contract voidable at the option of the party coerced | Voidable; alternatively the court may annul it, or uphold it with modifications |
| Benefit received | On 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.
| Basis | Wagering agreement | Contingent contract |
|---|---|---|
| Promises | Consists of reciprocal promises: each side stands to win or lose | Need not contain reciprocal promises |
| The uncertain event | Is the very core of the agreement | Is collateral to the contract |
| Interest of the parties | None in the subject matter; only the stake | The parties have an interest in the subject matter |
| Gain and loss | Purely a game of winning and losing | Not based on one side's gain being the other's loss |
| Relation between the two | Every wager is contingent in nature | A contingent contract need not be a wager |
| Effect | Void (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).
| Basis | Offer | Invitation to offer |
|---|---|---|
| Meaning | Final willingness to be bound on acceptance | Terms on which a person is willing to negotiate; it asks for offers |
| Intention | To be bound once the other accepts | Only to negotiate |
| Effect of a reply | Acceptance turns it into a contract | A positive reply is itself only an offer; no contract results |
| Sequence | Follows an invitation, if there was one | Always comes before an offer |
| Examples | A firm's letter offering a named buyer 500 cartons at a stated price | A 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
| # | Component | Marks |
|---|---|---|
| 1 | (i) Coercion and undue influence | 4 |
| 2 | (ii) Wagering agreement and contingent contract | 4 |
| 3 | (iii) Offer and invitation to offer | 4 |
| Total | 12 |
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