Undue Influence (Malaysia)

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VOIDABLE CONTRACTS * COERCION * UNDUE INFLUENCE * FRAUD * MISREPRESENTATION * MISTAKE PREPARED BY: TEH GUAN HONG GM04795 NUR SYAHIRAH BINTI HUSAINI GM04674 SAMEENA BINTI SIRAJ GM04558 ASHTON GM04801 NALINI BALAKRISHNAN GM04634 COERCION Coercion, as an element of duress, is grounds for seeking the cancellation of a contract or deed. When one party to an instrument is forced against his or her will to agree to its terms the document can be declared void by a court. In order words, a contract only be binding if both of the parties voluntarily consent to it. The consent should be invalid of one party is forced to consent by threats or under persuasion by the other. As defined in section 15 of the Contracts…show more content…
The lower court had found that payment was not voluntary but had been made under threat. The appeal was dismissed by the High Court which ruled that there was coercion as defined in section 15 of the Contracts Act. It further added that the definition in section 15 should only apply for the purpose contained in section 14, and not for the entire Act. Given this interpretation, the word ‘coercion’ in section 73 is not restricted to the meaning in section 15, and should be given its ordinary and general meaning. UNDUE INFLUENCE The doctrine of ‘undue influence’ is a development of equity to cover cases of particular relations and is sometimes used as a comprehensive phrase to include cases of coercion, domination or pressure within or without those special relations. This doctrine as embodied in Section 16 of the Contract Act 1950 is in substance based on English principles. Section 16 (1) reads: “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.” Section 16 (2) reads: In particular and without prejudice to the generality of the foregoing
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