Indian Contract Act,1872
Act No : 9
Section : "Undue influence" defined
1*[16."Undue influence" defined.-(1) A contract is said to beinduced by " undue influence where the relations subsisting betweenthe parties are such that one of the parties is in a position todominate the will of the other and uses that position to obtain anunfair advantage over the other. (2) In particular and without prejudice to the generality of theforegoing principle, a person is deemed to be in a position todominate the will of another- (a) where he holds a real or apparent authority over the other or where he stands in a fiduciary relation to the other ; or (b) where he makes a contract with a person whose mental capacity is temporarily or permanently affected by reason of age, illness, or mental or bodily distress. (3) Where a person who is in a position to dominate the will ofanother, enters into a contract with him, and the transaction appears,on the face of it or on the evidence adduced, to be unconscionable,the burden of proving that such contract was not induced by undueinfluence shall lie upon the person in a position to dominate the willof the other. Nothing in this sub-section shall affect the provisions ofsection Ill of the Indian Evidence Act, 1872. (1 of 1872.) Illustrations (a) A having advanced money to his son, B, during his minority,upon B's coming of age obtains, by misuse of parental influence, abond from B for a greater amount than the sum due in respect of theadvance. A employs undue influence. (b) A, a man enfeebled by disease or age, is induced, by B'sinfluence over him as his medical attendant, to agree to pay B anunreasonable sum for his professional services. B employs undueinfluence. (c) A, being in debt to B, the money-lender of his village,contracts a fresh loan on terms which appear to be unconscionable. Itlies on B to prove that the contract was not induced by undueinfluence. (d) A applies to a banker for a loan at a time when there isstringency in the money market. The banker declines to make the loanexcept at an unusually high rate of interest. A accepts the loan onthese terms. This is a transaction in the ordinary course ofbusiness, and the contract is not induced by undue influence.]
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