The Indian Contract Act 1872 in its section 15 talks about the ‘coercion’ as a vitiating element for a contract. Coercion can be defined as forcing someone to sign an agreement by the use of force, threats or any form of coercion. It is one of the defects that can be found in the consent of the parties to a contract. According to this section, if a contract is governed by coercion then such agreement can be cancelled at the option of the party whose consent was coerced.

• As provided under Section 15 of Indian Contract Act, 1872, coercion means the doing or the threatening of an act which is prohibited by law or the unlawful detention of a person or his property.

• Such threats or acts should force the party to conclude the contract other than voluntarily and this is against the cabin of free consent.

• Therefore, the purpose of the section is to ensure that contracts are not induced and are not made under pressure or any form of coercion so that individuals are not taken advantage of.

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Section 15 of Indian Contract Act, 1872: Explanation

Coercion is the committing or threatening to commit any act forbidden by the Indian Penal Code, or the unlawful detaining or threatening to detain any property to the prejudice of any person.

• In simpler words, Coercion, as defined under Section 15 of Indian Contract Act, 1872, necessitates that it is an act with which coercion is exercised against a person without freely entering into a contract. The act of force or threat itself must satisfy the elements of coercion. It further indicates that when a contract has been made under coercion, it is voidable. This again means that since the injured party was forced to endorse or not he/she can either affirm or cancel it.

• There may be or may not be physical violence, but there will always be a threat to act against one's will, usually accompanied by fear of harm or loss. It is possible to be coerced in ways other than physically, with threats to property and reputation.

Key Elements of Section 15 of Indian Contract Act, 1872

Section 15 of the Indian Contract Act, 1872, basically provides conditions or situations under which coercion may happen. They include:

• Threat or Unlawful Use of Force: There is an express or implied threat to bring about personal injury to the party or to someone in their family or even the property of the party. The threat involves either an illegal act or an act that would ordinarily be regarded as unlawful under Indian law.

• Fear of Injury: The person must be placed under serious and immediate fear by the threat that could go physical, emotional, or financial.

• Overcoming Free Will: A person being coerced in fact does not possess the ability to act according to their own free will. He is compelled to contract-the usually said meant by the coercive act.

• Voidable contract: A contract that has been entered into under coercion may, at the election of the injured party, be made void. This is expressed under Section 19 Indian Contract Act, 1872. 

Learn the Key Differences between Void and Voidable Contract

Coercion vs. Other vitiating Factors

We must understand the pressure from coercion is different from other vitiating factors that can affect a contract including undue influence, fraud and misrepresentation. 

Coercion vs. duress

Coercion and duress are closely related but they differ in legal contexts:

• Coercion is wider here as it included physical and mental compel

• Coercion in this case normally mean about sudden, physical force control or intimidation

• The former is essentially used in Indian law and latter is more frequently used in English law.

Coercion with respect to Fraud & Misrepresentation

If the information is provided without the true picture or if the information is given without care, this amounts to misrepresentation. Whereas, unlike coercion, the misinformation results in the consent being invalid due to the lack of intent to harm or force. Coercion includes intimidation or threat to get someone to enter into a contract.

Coercion v. Mistake

A mistake is the framework of making errors in understanding or assumptions by one or both parties, and that is distinct without coercion. Consent in coercion is extracted by force and consent in mistake relies on incorrect beliefs or misunderstandings. All of these vitiating factors weakening the consent operate in different ways.

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Landmark Judgements related to Section 15 of Indian Contract Act

Several landmark judgments have evolved in the interpretation of Section 15.

• In Ranganayakamma v. in Alwar Setti (1890), the Madras High Court held that coercion could be exercised by a third party in addition to that party in contract. By expanding the scope of coercion beyond direct threats, this decision expanded the ability of those one owes money, and are in turn attempting to force you to pay, to threaten you in your free time.

• Chikkam Amiraju v Chikkam Seshamma is another important case where the Privy Council held that the threat of criminal complaint could be used to coerce a plaintiff to give his consent to a contract.

• In Poosathurai v. In Kappapa Chettiar (1995) the Supreme Court accepted that economic pressure could be coercion in certain circumstances, and that coercion was not confined to physical threats.

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Coercion in Modern Day Context

Coercion used to primarily involve physical threats, but that rigidity is gone today’s examples of coercion go even beyond the physical. 

• Coercion comes in many forms in today’s world, not just bludgeoning at the door: it can be economic threats, blackmail, emotional manipulation, threats to your reputation or personal safety. Section 15 of the Indian Contract Act, 1872, is therefore broad and flexible to the situation in the contemporary scenario.

• For example, a business may pressure a person into signing a bad contract by threatening that the person will not be paid for services or will have their professional reputation tarnished. In personal relationships, coercion also exists, when one partner threatens to harm the other’s family or property.

Learn about Future Contracts under Indian Contract Act, 1872

Remedies under Section 15 of Indian Contract Act, 1872

Uncertain of its existence or application under coercion, the law regards contracts based in coercion as being voidable at the option of the party coerced. Here are the remedies available:

• Rescission of Contract: However, the aggrieved party has the option to declare that it never existed, and will annul the contract. Once the remedy has been effected, this returns both parties to a position prior to the making of the contract.

• Restitution: Perhaps, under a coerced contract, if benefits were 'exchanged', the party pressing for the rescission may have to return the benefits received.

• Damages: The aggrieved party may also seek compensation for losses he suffered as result of the coercion.

• Legal Action: The coerced party can request from the court for relief, and to enforce rights under the Act.

Also, Get to Know What is meant by Discharge of Contracts

Summary

Section 15 of the Indian Contract Act, 1872 is important in that it sees to it that all parties in a contract form with their free will. It stops those unscrupulous people from threatening or using unlawful force to exploit others. The law makes the contracts formed out of undue coercion voidable as a safeguard for any person who, by reason of undue pressure, may have been induced to enter a contract. Section 15 of the Indian Contract Act, 1872 lays down the legal framework which puts value to the consent in contractual relations and what follows from the principle that consent is a genuine agreement of all the parties to the contract without any form of coercion. Both parties need to understand this provision because it helps avoid putting people into an undesirable or unfair agreement by coercion.

Section 15 of Indian Contract Act, 1872

Q1. What is defined under section 15 of the Indian Contract Act, 1872?

Section 15 defines coercion to be doing or threatening to do an act prohibited by the Indian Penal Code or unlawfully detaining property to compel a person to execute a contract.

Q2. What happens to a contract that is coerced into existence?

Under coercion a contract is voidable, meaning the party coerced can either perform or rescind the contract.

Q3. Do threats to property constitute coercion?

Yes, unlawful threats to detain or harm a property falls under coercion under Section 15 of Indian Contract Act, 1872.

Q4. Are there any remedies for coercion?

Remedies are rescission of the contract, restitution of benefits exchanged and the potential for compensation for losses.

Q5. Is coercion something limited to physical force?

No, Coercion is not limited to threats of harm, unlawful detention of property, or acts of such feasible law.