Definition: Coercion is the primary element that vitiates free consent of the party. It refers to the method of inducing another party to act in a certain manner, which is against their will.
In coercion, one party commits or threatens to commit an act which is not permissible under the Criminal Code. It also covers the detaining or threatening to detain the property, against the law, as well as against the will of the person, so as to compel the party to form an agreement.
Section 15 of the Indian Contract Act, 1872 deals with Coercion.
It must be noted that in coercion, it is not necessary that coercion must be practised by a party to the contract. Further, it is not required that the subject of the coercion has to be the contracting party, i.e. it may be aimed at against third person, even a stranger, goods, documents or property.
Moreover, it covers the performance of any act which is prohibited under the Criminal Code, i.e. Indian Penal Code in case of India, even if the act has happened in an area where the Code is not in force.
It includes a number of menacing activities that violate the free consent of a person, to generate a specific response. These can be blackmail, threat, duress, torture, extortion, unlawful detaining, etc.
The examples given below explains the agreements induced by coercion:
- Paul threatens to implicate Michael in the false murder case if he denies marrying Paul’s daughter. Michael gets ready to marry Paul’s daughter out of threat.
- John at the gunpoint orders Steve to make a promissory note in his favour, in order to save his life and consequently, Steve signs the note.
- Harry compels Jenny to sign a deed threatening her to harm Lisa (Jenny’s mother) if Jenny does not agrees to sign the deed and due to threat, she signs it.
- James threatens Robert, that he will kill his son, if he does not agrees to sell his bungalow to James, for 50 lakhs, whose market price is 5 crores. Further, due to threat Robert signs the deal and sells his house.
- Alex threatens Sofia to commit suicide if he refuses to marry her. Alex accepted the offer because of the threat which amounts to coercion.
In all the above cases, the aggrieved party can avoid the agreement entered into, due to the absence of free consent, as well as they can enforce the contract if they find it beneficial. This is because the agreement is induced by coercion which is considered as voidable contract and not a void contract.
Therefore, the party under coercion has the right to enforce it, but such an option is not available to the party using coercion.
Effects of Coercion
It is quite obvious that the contract entered into due to the effect of coercion do not have free consent. In this way, the following instances are possible:
- As discussed earlier, the contract brought about due to coercion becomes voidable, at the option of the aggrieved party.
- With respect to the result of recission i.e. revocation of a voidable contract, the party who revokes a void contract, have to restore any benefit received from the other party.
- If due to coercion money has been paid or certain stuff is provided, it must be repaid or returned.
It must be noted that mere threat by one party to other to prosecute does not result in coercion. The aggrieved party must have entered into a contract out of that threat, which can be avoided on account of coercion.