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What is meant by undue influence under Indian the Contracts Act, 1872?

According to Section 16 of the Indian Contracts Act, 1872, the following acts are called as undue influence;

a) A contract is said to be induced by “undue influence” where the relations subsisting between the parties are such that one of the parties is in a position to dominate the will of the other and uses that position to obtain an unfair advantage over the other.

b) In particular and without prejudice to the generality of the foregoing principle, a person is deemed to be in a position to dominate the will of another-

  • where he holds a real or apparent authority over the other, or where he stands in a fiduciary relation to the other; or
  • 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.

c) Where a person who is in a position to dominate the will of another, 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 undue influence shall lie upon the person in a position to dominate the will of the other.

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