Coercion is a term which denotes that a person is compelled to do or no to do something as against his willingness of interest. As the view point of contract law; it is an act of using unlawful force for obtaining consent of person who does not voluntarily agree to enter into a contract. Therefore when a party of contract is compelled to enter such contract with use of force by another party under a threat is known as coercion. Under the English law it is known as duress.
According to section 15 of Indian Contract Act, 1872 Coercion is the committing or threatening to commit any act forbidden by Indian Penal Code, or the unlawful detaining, or threatening to detain any property to the prejudice of any person whatever, with the intention of causing any person to enter in to an agreement. Likewise, Section 14(1) of the Nepal Contract Act, 2056 has explained the term 'Coercion' as a person should be committed coercion If he, with a view to make any person enter in to any contract against his will, withholds his property or threatens to loss his life, or threaten to commit any other work against the prevailing law.
In conclusion, the term coercion can be defined as "a person is compelled to enter into a contract against his will due to extra-legal pressure is known as coercion in the sense of contract law". If a contract is made by coercion, the aggrieved party must file a case against it within a year to have it declared invalid. Otherwise it amounts the status of valid contract.
The following acts are included in the coercion:
- Committing or threatening to commit any act forbidden by the law.
- Unlawfully detaining or threatening to detain any property or life or reputation.
- Threatening to insult a person for compelling him to enter into a contract.
Features of coercion:
The Features of coercion are as follow:
- Coercion means to threaten or to attain the act against of law.
- Not only the contracting parties but also a third person may be threaten.
- Coercion should be constituted to enter into an agreement.
- Coercion can be constituted in the country or any other places.
- Consent is caused by coercion, when
- Committing or threatening to commit any act forbidden any law.
- Unlawfully detaining or threatening to detain any property.
- Threatening to injure body, life, or prestige of a person.
Conditions or Circumstances for non-coercion
In some special circumstances or cases, to compel a person to do or threaten to do some thing does not amount coercion. In such cases it is not regarded as coercion. These are given below:
1. A threat to prosecute:
If any person makes threaten to another person to file case against him for compelling him to enter into contract is not regarded as coercion. The condition is that the threat should not be of false case.
2. A threat to commit suicide:
If any person obtains consent, by threatening to commit suicide from another person, is not coercion. Threat to commit suicide is not regarded crime therefore it is not coercion. Threatening to commit suicide is not punishable by Indian penal code also.
3. High Price:
Persons are free to purchase goods as their will but due to necessity they have to purchase goods even in high price. Only the ground of purchasing goods in high price is not regarded as coercion. But nobody can bind anybody to purchase his own goods.
4. High Rates of Interest:
Like the high price, the high rate of interest also does not amount the coercion. Person may be compelled to borrow loan from another due to his own compelling circumstances but it is not regarded as coercion. However, nobody can be or is entitled to bind anybody to borrow loan only with him.