Site navigation

A contract is made between two persons in a relationship of trust and confidence. What is the effect of that relationship under Section 16 of the Indian Contract Act, 1872?

Question and options

A contract is made between two persons in a relationship of trust and confidence. What is the effect of that relationship under Section 16 of the Indian Contract Act, 1872?

  1. One party is deemed to have used undue influence, but the contract stands unless the other party avoids it

  2. One party is deemed able to dominate the other's will, but unfair use of that position must still be shown

  3. Neither party is deemed able to dominate the other's will, but the court may infer it from an unfair price

  4. The party is deemed able to dominate the other's will, and the contract is therefore void

Answer and explanation

Correct answer: B - One party is deemed able to dominate the other's will, but unfair use of that position must still be shown

Under Section 16(2)(a) of the Indian Contract Act, 1872, a person in a fiduciary relation to another is deemed to be in a position to dominate his will. Undue influence under Section 16(1) also requires that the position be used to obtain an unfair advantage, so the relationship alone neither makes the contract void nor voidable. Threats belong to coercion under Section 15.

Practice for these exams

Related exam syllabi

More solved explanations in Free consent