Topic Name:1957705243840Examples of Coercion, undue influence, fraudSubmitted ByNida NazRoll no.F17-BS-01BS Commerce 3rd SemesterSection AAssignment No. Three (03)Submitted to.Sir Atif MirDepartment of CommerceGovernment College of Management Sciences HaripurDate: Wednesday, November 21, 2018Free ConsentCoercion:Coercion is the threat of harm used by one party against another to compel him to enter into agreement.
It means to forcibly compelling someone to enter into the contract.Examples of coercion:Example: Mr. Shahmeer pressurizes the Mr. Saad to hurt him if he does not sell his bike to him for Rs. 10000. Now, if Mr. Saad sells his bike to Mr.
Shahmeer it will not be a valid contract as the consent of Mr. Saad is acquired by coercion.Example: Zartaab Khan threatens Resham to kill her whole family if she does not marry him. In this case consent of resham is not free as the coercion pressurizes it.
Example: Zain kidnapped the Zia and ask him to give his car. If Zia gives his car, the consent of Zia is not free as it is obtained by coercion.Example:Terrorist forced the Junaid to fight against his home country by threatening his life. The Junaid’s consent is obtained by coercion.Example:Asad threatens to inflame Hassan’s house if Hassan does not give him his house on rent on stated price. The Hassan’s is obtained by coercion.
Example: Imran by giving threat to commit suicide induces his wife to sign the property papers. The wife’s consent is not free as it is obtained by coercion.Example: After beating the Ahmed, Hussain makes him agree to sign the contract forcibly. So, in this case consent of Ahmed is acquired by coercion.Example: Fawad threats to Fahad to detain his business documents if he does not sell his property to him according to stated price.
Fahad asks the Fawad not to detain the business documents and agrees to sell his property to him. In this case the consent of Fahad is obtained by the coercion.Example: Abdullah forced the Umer to enter into contract in London. Umer later sues for breach of contract later in Karachi. Abdullah has applied coercion even though Pakistan Penal Code was not enforced at the time of contract. Example:Amir threatens to Umair to kidnapped his son if he does not lend him Rs.100000. Amir agrees to lend the amount to Umair.
Hence, the agreement is made under the coercion.Undue influence: Undue influence means unfair use of power or authority.Examples of Undue Influence:Example: A school teacher compels the student to sell his new mobile to her on very nominal price to get good marks in exams. Here, the consent of student is acquired under undue influence.
Example: A spiritual leader persuades his follower to gift him to the entire of his possessions in return of promise of rescue of follower. Here, the consent of follower is achieved under undue influence.Example: An old woman sells her son land worth 150,000 for 50,000. Her son when came to know about that he can’t sue against his mother.
In this case mother took advantage of trust which her son had on him.Example: Akram that is weakened by sickness is persuaded by Amir’s pressure over Akram as his doctor to make him agreed to give unreasonable amount of money for his specialized services. In this case, Amir applies undue influence on Akram.Example: Arif give loan to Ejaz, who is of unsound mind, on greater interest rate. It is held that Arif is applying undue influence over Ejaz.Example: Aiman’s husband transferred titles to all his properties to his brother. After the death of husband, Aiman claimed that contract was made under the undue influence and shows to court that she has trusty and beneficiary relationship with her husband. Court declared the contract as void.
Example: Alina sued Saima (needy widow) for failure to pay debts. The interest rate is at 30% and Alina also took Saima’s land as a security. Decided that Alina has done undue influence as interest rate is too high for loan along with the land as a security for loan.Example: A husband and wife are in possession of a family company and the company’s liabilities to its bank were protected, between further belongings, via charges of the wife’s house.
The bank wanted to put in force the securities and the wife implored actual undue influence by the husband. Although the judge found that such influence had been recognized, he refused to set aside the charges as it had not been proved that they were noticeably detrimental to the wife. Example:Farhan, an aged man of 89 years whose wife had passed away. After that he heired Aqsa as secretary. From the start she was in position of loyalty, and further in management of the house she took active part in running Farhan’s dealings. From the time of Aqsa’s service and Farhan’s death ( March 1969 – November 1974) he granted her gifts worth Rs.
30,000 from his total assets of Rs. 50,000.It was decided by the court that All the gifts complaint of where such as to gratify the necessities to lift up the assumption of undue influence, that they could not be accounted for on the ground of the normal reasons on which common men take action, and secondly, that the affiliation between Farhan and Aqsa involved such assurance by Farhan in Aqsa as to put her in a place to use undue influence over him. Aqsa unsuccessful to free the responsibility on her of setting up that the gifts were merely made after ‘full, free and notified discussion’ so as to invalidate the assumption of undue influence. The gifts would, so, be put to one side. Example:In 2000 one girl age twenty five wanted a priest as a confessor. The following year she became member of the sisterhood of that he was holy leader and in 2004 she was confessed a full member, taking promise of inadequacy, chastity and conformity. With no free recommendations, she created donations of money and provides to the abbess on behalf of the sisterhood.
She left the sisterhood in 2012 and in 2017 claimed the comeback of the providers. Measures to recuperate the provides were originated in 2018.It was control by the Court of Petition that even if the litigant’s donations were revocable since of undue influence carried to tolerate upon the plaintiff throughout the steerage she had received, she was disentitled to recuperate since of her behavior and therefore the stoppage.Fraud:Fraud means intentional or willful misstatement of facts which are necessary for formation of the contract.Examples of fraud:Example: Rashid bought ox from Sajid. Rashid say the ox can be used on the cattle farm.
Later, Rashid came to know that the ox is feeble and Rashid cannot use it on his cattle farm. Here Sajid intentionally misinformed Rashid. So, this case will consider as fraud.Example: Usman sells his car to Asghar knowing that the engine of car is not in good condition and tells nothing about it to the Asghar. Here Usman is intentionally deceiving the Asghar.Example:Example: Mirha was persuaded to purchase shares in a corporation on explanation of fake statement told her by unfamiliar person. It was decided that she could not get out of negotiates because the fake statement was not told by corporation or its manager.
Example: Shopkeeper says to Ifra that jacket is made of pure leather. Even if he knows it is untrue but Ifra believes on the statement made by him and purchased the jacket. It is fraud by Shopkeeper.Example: Saad deceitfully notifies Faisal that Saad’s property is liberated from complexity.
So, Faisal purchases the property. Later, he came to know that the property is mortgaged. Faisal may keep away from the deal or may persist on its being carried out and the mortgage debt reimbursed by Saad. The aggrieved party can litigate for compensation. Compensation is payable because fraud is held.Example: Muneeba be familiars with that her ring is not made from pure gold but tells her friend Sumaira that it is of pure gold. Sumaira purchased the ring.
Muneeba is blameworthy of fraud. Example: Iqra lend money to Farah (amateurish woman) but did not disclose to her the interest rate to her and later charged the high interest rate. Iqra is guilty of fraud as she did not disclose the facts at the time of agreement.Example: Minahil had created dishonorable false statement to the Madiha (uneducated female) furthermore evoked her to enter into sale and buy agreement. The Minahil delineated deceitfully to the Madiha the document she was needed to sign was a loan that she had taken and to free and also the land from the charge. In fact, it absolutely was sale agreement of the land. Hence, Minahil had done fraud. Example:Ali sold his car to Ahmed for Rs.
3 lac. The car was mortgage with Bilal for Rs. 1 lac. Ali didn’t notify Ahmed about it. Later on Bilal claimed Rs.1 lac from Ahmed.
Ahmed can avoid the contract as Ali is blameworthy of fraud.Misrepresentation:It means false representation of facts made innocently or non-disclosure of material fact of contract without any intention to deceive the other party.Example of misrepresentation:Example: Alice needs to buy for a house inside the Salt Lake City area of Utah. Alice contacts Martin, a realtor, and arranges to determine several homes that unit on sale. Once choosing out the house he likes, Alice asks the soul if the house includes insect draw back. The house can have an insect draw back but the owner, knowing that Alice will not get the house if he’s aware of concerning the insect draw backs, tells Alice that there is no insect draw back. Alice and additionally the owner sign a contract beneath that Alice will get the house for $370,000. Once the contract is sign, Alice finds out about the insect draw back.
Throughout this case, the contract area unit progressing to be voidable by Alice as results of the owner created a deceptive false statement that Alice relied on and, supported that false statement, Alice entered into the contract.Example: Arham put up for sale his van and also be familiar with that there is problem in the engine of the van but yet he sold the van by creating misrepresentation that car is in perfect mechanical condition. At this point he makes fraudulent misrepresentation.Example: If a true agent is merchandising a property that contains a major defect like injury to the inspiration, the owner could have told the agent that nothing is wrong with the house. The agent contains a responsibility to form certain the owner is telling the reality before representing the house as being freed from defects to potential patrons. This might be consideration of neglectful false statement.Example: A marketer who notifies a customer that a tape player is perfect new, once in reality it’s six years old and has been utilized by different homeowners, this could represent a false statement if the vendor was uninformed of the tape player’s history.
Example: Carl sold out George a personal hi-fi for Rs.150, declaring it fully equipped. George pay money for the personal hi-fi supported the info, conversely the personal hi-fi clad to be imperfect. Consequently, the Court canceled the agreement. George obtained his reimbursement, and electro-acoustic transducer got the personal hi-fi.
Example: The complainant purchased from the suspect land of 3 blocks for the purpose of ewe farming, throughout consultation the suspect aforementioned that if the place was worked correctly, it may carry 1500 Ewe. The complaint paid money for the place basic cognitive process so as to it may bear 1500 Ewe. Each party were aware with the intention of the suspect hadn’t conceded on ewe-farming on the land. Within an act for false statement the magistrate said: “Within standard situation, any declaration created by means of a proprietor who has Occupying his possess cattle farm on its carrying capability would be thought to be an Announcement of truth… This, however, isn’t such a case. In these circumstances, the defendants weren’t even in relating to something same by the complainant on the carrying capability as being something quite an appearance of his view on the topic.”The council harmonized during this read of the substance, and so control so as to, within the nonattendance of fraud, the client had no right to revoke the contract.Example: The litigant locates up his building purchasable conditioning it absolutely was allowable toward fascinating occupant. The occupant combined to pay money for the building.
The occupant was insolvent intended for carrying into action. The court of petition command that the litigant’s declaration wasn’t meager estimation conversely was one among truth. Example: During 2001 an abode had regenerate keen on 6 flats. During 2008 Flat No.3 was allow for 4 years at rental fee yearly of Rs.
2000. Inside 2017 the litigant obtained a protracted rent of the edifice, aspiring to mend bomb injury as well as do considerable modifications. The complainant and litigant mentioned the rental fee to be charged once the work had been accomplished. The complainant remunerated rental fee at Rs.2500 p.
a. for a few times then took dealings intended for a statement that the quality rental fee was Rs.1000. The litigant challenged with the intention of the flat had turned out to be a replacement along with separate habitation through cause of modification of individuality, and so not subject to the rental fee restriction acts. This was command to be a statement of reality.Example: The bargain hunter of property asked the seller’s barrister if there are any preventive conventions on the property as well as conjointly the barrister aforesaid he did not acknowledge of any. He did not utter with the purpose of he had not perturbed to scrutinize the papers.
The court guidelines with the intention of though the declaration was just about factual it completely were a false statement. There are preventive conventions as well as conjointly the contract may possibly be repealed.Example: In the course of consultations intended for the auction of a practice the seller created demonstrations to client with intention of its price Rs.3000 per year. By means of the occasion once contract was signed they were untruthful the worth of follow had rejected within the meantime due to seller’s powerlessness to be present at to that through ill health. William cited: “So once more if press release has been created that is factual at occasion however that throughout the course of consultations turn out to be fictitious after that one who is aware of so as to its turn out to be fictitious is below responsibility to divulge heart’s contents to the opposite the amendment of situation.”Consequently, the malfunction of seller to reveal situation toward client considered as false statement. Mistake: Mistake means as incorrect belief about something.
It leads another party to misunderstand the terms.Bilateral Mistake: “Bilateral mistakes are the mistakes where both parties to an agreement are under mistake as to the matter of fact essential to the agreement, there is a bilateral mistake and agreement is void.”Examples of Bilateral Mistakes:Example: Ali comply with put up for sale his automobile to somebody for Rs.150000. Neither the person nor he is aware of that his automobile was destroyed previous nighttime. Consequently the contract can’t probably be carried out. The contract may be stay away from by either party.Example: Saad has to purchase goods from Fahad which was in shop of Fahad.
The shop of Fahad was entirely destroyed through the flames a day before. The agreement is void because mistake is mutual.Example: Ali has the same opinion to put up for sale to Faisal a particular shipment of products that is on its approach as of overseas.
However, sadly the boat carrying the shipment cast out previous to the date or discount. Neither Ali nor Ahmed was responsive to this. Here the case is of bilateral mistake.Example: Shahwaiz in agreement to require a rent of a workplace as of Shahmir, Shahwaiz was previously permitted to the workplace. However no party by the side of the moment of the dealings was responsive to truth condition of title.
The conformity was detained to be void as it is done under mistake.Example: Ahmer have the same opinion to put up for sale to Bilal his camel. Although by the side of the moment of the conformity, camel had previously passed away. Neither Ahmer nor Bilal was responsive of this. Along with as a result here is no contract in any respect at as because of a mistake of fact it is void.Example: Denial goes into a contract by way of Raza to engage in recreation in a very performance, on a specific day of the week, to be prearranged by the latter. However, Denial couldn’t contribute within the plan because of sickness on it day. The court of rule commands so as to the contract turn out to be void on explanation of impracticality to carry out.
Example: A gray slab was sold-out underneath an error on its heaviness. Here was a distinction in price among the weight because it was imagined to be. Because of mistake agreement was void.Example: Arif who was aged gentleman of reduced spectacle supported the bill of exchange thought it absolutely was an assurance. Detained, there was no contract on the bottom that the intellect of the signer failed to escort the signature.Example: Imran engraved to Waqar providing to put up for sale sure possessions for Rs1500.
He had earlier declined a suggestion from Waqar to shop for a similar property for Rs.2500. Waqar who knew that this provider of Rs.
1500 was an error for Rs.2500, directly acknowledged provide. Detained, Waqar be acquainted with absolutely fine that provide was created through mistake and hence the contract couldn’t be enforced. Example: Usman conform to purchase land on street; once reaching to observe the land before the acquisition was finishing. Usman notice with the intention of the land is on Road not on street. Usman will stay away from the contract as a result of mistake of the subject matter.