Coercion in Contract Law - Overview, Structure, Properties & Uses

Coercion in Contract Law

Edited By Ritika Jonwal | Updated on Jul 02, 2025 05:49 PM IST

In terms of contractual law, coercion indicates that threats or actual wrongdoing were used to get someone to sign an agreement. In the unlikely event that coercion has a role in the formation of a contract, it will not be legally binding.

An agreement must have been gladly entered into by the two parties for it to be legally executory. Nevertheless, the agreement cannot be enforceable if one party was coerced into signing it, meaning that threats were used to get their consent.

This norm, which is associated with coercion, applies to both the express terms and the whole agreement. Essentially, this means that parties to a contract have to agree to all of the conditions as well as the agreement as a whole. In the unlikely event that it is discovered that coercion played a role in the agreement's establishment, the understanding will often be revoked.

This Story also Contains

Meaning of the word Coercion
Coercion under Section 15
Elements of Coercion under the Indian Contract Act 1872
Impact of Coercion under Contract Law
Case Laws on Coercion under the Indian Contract Act
Conclusion

Coercion in Contract Law

Meaning of the word Coercion

The act of committing or threatening to commit any act prohibited by the Indian Penal Code, or the unlawful detention or threat of detention of any property, to the detriment of any person whatsoever, with the intent to cause any person to agree, is defined as coercion under Section 15 of the Indian Contract Act, 1872.
When someone is coerced into doing something against their will or is prevented from doing a certain action, coercion is the use of force, threats, intimidation, or excessive pressure.
It entails using force or control over another person, frequently in an effort to change that person's behaviour, choices, or actions.
Coercion may occur in a variety of settings and situations, including personal relationships, the workplace, commercial transactions, and even broader social contexts.
It is crucial to understand that coercion is typically seen as immoral and illegal as it infringes on a person's autonomy and freedom to make decisions without fear of damage or unfavourable outcomes.
Within the legal domain, coercion legislation may pertain to particular behaviours that are illegal under the law, such as extortion, blackmail, and violent threats.

Coercion under Section 15

The use of force to persuade someone to sign a contract is known as coercion. Therefore, it is not free consent when force or threats are used to get the assent of the individual being coerced. According to Section 15 of the Act, coercion is:

Engaging in any activity that the IPC forbids or threatening to engage in any such activity.
Illegally reserving or threatening to reclaim any property to pressure someone to sign a contract.

Example: If B doesn't sell his house to A for 5 lakh rupees, A threatens to injure him. Given that B's assent was gained by compulsion, even if B sells the house to A, the agreement will not be enforceable.

Elements of Coercion under the Indian Contract Act 1872

Illegally reserving or threatening to reserve any property: This component entails using or threatening to illegally reclaim property to compel a party to sign a contract. Depriving someone of their belongings without a valid reason is known as unlawful detention.
Any of the following offences are prohibited under the Indian Penal Code, either by act or threat: This aspect deals with circumstances when one party coerces the other party into signing a contract by using or threatening to use force, assault, or any other conduct that is illegal under the law. For an act to be considered coercion, it must be prohibited by the Indian Penal Code.
Intention to induce someone to enter into a contract: Any coercion must be used with the express purpose of compelling the target party to sign a contract against their will. Under the Indian Contract Act, coercion may not include the mere use of force or threats made without the aim to force someone to sign an agreement.

Protecting Against Coercion

An agreement can be intimidated by the threat of "unclean hands," which is a safeguard.
The main idea behind unclean hands is that one group cannot be subjected to coercion because another group deserves a comparable protest.
An alternative way to understand this idea is that the agreement was shaped by the constraints placed on the two parties.

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Impact of Coercion under Contract Law

According to the Indian Contract Act, of 1872, Section 19, "An agreement is a contract voidable at the discretion of the party whose consent was thus induced where assent is caused by force, fraud, or misrepresentation.”
As a result, coercion has the consequence of making the contract voidable at the choosing of the person who was coerced. This implies that the party that was pressured has the option of accepting the contract or rejecting it and having it ruled void.
If coercion was used to induce the contract, the affected party must use their right to avoid it as soon as reasonably possible after the compulsion has stopped. The contract may become enforceable and legitimate if they carry out their end of the bargain without quickly using their right to withdraw.
Both parties must return any advantages or consideration they acquired from one another under the terms of the contract if the compelled party decides to avoid it. Essentially, they have to put each other back in the same situation as before the contract was signed.

Case Laws on Coercion under the Indian Contract Act

Askari Mirza v. Bibi Jai kishori

An individual was the subject of a criminal indictment, and fearing the repercussions of being arraigned, he agreed to the next gathering abandoning the indictment. It was decided that the Indian Penal Code does not inherently prohibit demonstrations with the possibility of criminal prosecution. Thus, consent is crucial.

Chikham Amiraju v. Chikham Seshamma

In the present case, a Hindu man makes a suicide threat, prompting his partner and kid to carry out the arrival of many properties for his brother, which they have pledged to be their own. It was decided that the risk of suicide equates to intimidation, and the discharge deed is therefore voidable due to the application of section 15.

Ranganayakamma vs. Alwar Setti (1900)

In this instance, the court stressed that the act of coercion must be the "dominant" factor that persuades someone to enter into a contract for it to be a basis for contract avoidance.

Abdul Razzak Sahib vs. Mahomed Cassum & Co. (1917)

In this instance, the court stressed that the act of coercion must be the "dominant" factor that persuades someone to enter into a contract for it to be a basis for contract avoidance. This case made it clear that wrongful detention of property can also result in coercion, in addition to acts or threats. The court decided that coercion might be implied by threatening to stop someone from engaging in their trade.

Conclusion

It's critical to recognise that coercion is a legally defined term with proof requirements that must be met by the side attempting to break the contract. The contract might not be affected in the same way by simple persuasion or pressure, which does not fall under the legal definition of coercion.

Frequently Asked Questions (FAQs)

1. What is coercion in a contract?

The term "coercion" refers to the following: engaging in any behaviour that is prohibited by the Indian Penal Code (45 of 1860) or threatening to engage in any of these actions; it also refers to the unlawful detention or threat of any property, against the will of any individual, to force that individual to sign a contract.

2. What does the term "coercion" mean?

Placing a "knife under the throat" or "putting a gun to someone's head" are common examples of using coercion to force cooperation under the threat of the attacker injuring or even murdering the victim.

3. What does the Contract Act's Section 14 mean?

According to Section 14 of the Indian Contract Act 1872, assent is unqualified if it isn't acquired via deception, fraud, undue influence, coercion, or error. If any of the above methods take the consent, then the contract is voidable at the choice of the aggrieved party.

4. What does coercion mean?

The act of forcing someone to do something they do not want to do is known as coercion. There needed to be no compulsion or intimidation during the polls. Synonyms: coercion, strain, intimidation, and teasing Additional Words for "coercion."

5. Which are the two categories of coercion?

Deterrence and Compellence, the two primary forms of compulsion, differ in their nature and prerequisites. One cannot and does not know the precise reason (or reasons) behind an actor's decision to abstain from a behaviour.

6. How does coercion differ from undue influence?

While both coercion and undue influence can invalidate a contract, coercion involves direct threats or force, whereas undue influence is a more subtle form of pressure, often arising from a relationship of trust or authority.

7. Can economic pressure be considered coercion?

Generally, economic pressure alone is not considered coercion in contract law. However, if the economic pressure is combined with unlawful threats or actions, it may constitute coercion.

8. How does the "but for" test apply to coercion cases?

The "but for" test in coercion cases asks whether the party would have entered into the contract "but for" the coercive act. If the answer is no, it suggests that coercion may have occurred.

9. What is the difference between physical and economic duress?

Physical duress involves threats of bodily harm or actual violence, while economic duress involves threats to a person's financial well-being or business interests. Both can be forms of coercion, but physical duress is typically easier to prove.

10. What remedies are available to a victim of coercion in contract law?

The primary remedy for a victim of coercion is to have the contract declared voidable. This means the victim can choose to either rescind (cancel) the contract or affirm it. In some cases, damages may also be awarded.

11. Can emotional manipulation be considered a form of coercion?

Emotional manipulation alone is typically not considered coercion. However, if it rises to the level of severe psychological pressure that effectively removes free will, it might be deemed coercive.

12. What is the difference between coercion and fraud in contract law?

While both can invalidate a contract, coercion involves forcing someone to enter a contract against their will, whereas fraud involves deceiving someone into entering a contract based on false information.

13. Can coercion be used as a defense in all types of contracts?

While coercion can potentially be used as a defense in most types of contracts, some contracts (like those involving national security) may have limitations on using coercion as a defense.

14. Can a person claim coercion if they had time to seek legal advice before signing?

Having time to seek legal advice doesn't automatically negate a claim of coercion, but it can weaken it. Courts may consider whether the person reasonably could have sought help or resisted the coercion.

15. What is the role of intent in determining coercion?

The intent of the party alleged to be coercing is important. Courts will consider whether they intended to force the other party into the contract through improper means.

16. What are the key elements of coercion in contract law?

The key elements of coercion are: (1) a threat or use of force, (2) the threat is improper or unlawful, (3) the threat induces the other party to enter the contract, and (4) the threatened party had no reasonable alternative but to agree.

17. Can a third party's threats constitute coercion?

Yes, threats from a third party can constitute coercion if the other contracting party knew about or should have known about the threats and took advantage of the situation.

18. What is the relationship between coercion and duress in contract law?

Coercion and duress are often used interchangeably in contract law. Duress is a specific form of coercion that involves unlawful pressure or threats to compel someone to enter a contract.

19. Can silence or inaction be considered coercion?

Typically, silence or inaction alone is not considered coercion. However, if combined with other threatening circumstances or a duty to act, it might contribute to a coercive situation.

20. How do courts determine if a threat is "improper" in coercion cases?

Courts consider factors such as the nature of the threat, the fairness of the resulting contract, and whether the threat violates public policy or law to determine if it's "improper" in the context of coercion.

21. What is coercion in contract law?

Coercion in contract law refers to the use of force, threats, or pressure to compel someone to enter into a contract against their will. It undermines the fundamental principle of voluntary agreement in contracts and can render an agreement voidable.

22. How does coercion relate to the concept of "meeting of the minds" in contract formation?

Coercion directly contradicts the "meeting of the minds" principle in contract formation. This principle requires voluntary agreement between parties, which is impossible if one party is coerced.

23. Can a person be coerced into signing a contract by non-violent means?

Yes, coercion doesn't always involve violence. Threats of economic harm, damage to reputation, or other non-violent but serious consequences can also constitute coercion.

24. What is the role of free will in determining coercion?

Free will is crucial in determining coercion. If a person's free will is overborne by threats or pressure to the point where they feel they have no real choice but to enter the contract, coercion may be found to exist.

25. Can coercion be claimed if the threat is to do something legal?

Generally, threats to do something legal (like filing a lawsuit) are not considered coercion. However, if such threats are used improperly to force unfair contract terms, they might be deemed coercive.

26. What is the difference between coercion and unconscionability in contract law?

While coercion focuses on the process of contract formation, unconscionability deals with the fairness of the contract terms themselves. A contract can be unconscionable without involving coercion, and vice versa.

27. Can a threat to breach an existing contract be considered coercion for a new contract?

Threatening to breach an existing contract to force someone into a new contract can potentially be considered coercion, especially if it would cause significant harm and leave the threatened party with no reasonable alternative.

28. How does the concept of "voluntary agreement" relate to coercion in contract law?

Voluntary agreement is fundamental to valid contracts. Coercion directly undermines this principle by forcing a party to agree involuntarily, which is why coerced contracts are voidable.

29. What role does the severity of the threat play in determining coercion?

The severity of the threat is a key factor in determining coercion. Courts consider whether the threat was serious enough to overcome the will of a reasonable person in similar circumstances.

30. What is the relationship between coercion and capacity in contract law?

While coercion deals with external pressure, capacity relates to a person's mental ability to understand and enter into a contract. Both can affect a contract's validity, but they are distinct concepts.

31. How does the concept of "efficient breach" relate to coercion in contract law?

The theory of efficient breach, which suggests it can be economically efficient to breach a contract and pay damages, doesn't apply to coerced contracts. Coercion undermines the voluntary nature of the agreement that efficient breach theory assumes.

32. How does the concept of "reasonable person" apply to coercion cases?

Courts often use the "reasonable person" standard to determine if coercion occurred. They consider whether a reasonable person in the same situation would have felt compelled to enter the contract due to the alleged coercive acts.

33. What is the statute of limitations for claiming coercion in a contract?

The statute of limitations for claiming coercion varies by jurisdiction but typically begins when the coercion ends or when the victim becomes aware of it. It's important to check local laws for specific timeframes.

34. What is the burden of proof in coercion cases?

The burden of proof in coercion cases typically falls on the party claiming coercion. They must provide clear and convincing evidence that they were coerced into entering the contract.

35. How does coercion affect the validity of a contract?

Coercion can render a contract voidable, meaning the coerced party can choose to either affirm or rescind the contract. If rescinded, the contract is treated as if it never existed.

36. How does the concept of "clean hands" apply in coercion cases?

The "clean hands" doctrine suggests that a party seeking relief from coercion must not have engaged in unethical behavior themselves. If they have, it may affect their ability to claim coercion.

37. How does coercion differ in business contracts versus personal contracts?

While the basic principles are the same, courts may apply a higher standard for proving coercion in business contracts, assuming that businesses have more resources and sophistication to resist pressure.

38. What is the impact of coercion on subsequent modifications to a contract?

If the initial contract was formed under coercion, subsequent modifications may also be voidable, especially if the coercive circumstances continued to exist.

39. How does the principle of ratification apply to contracts formed under coercion?

Ratification occurs when a party, after the coercion has ended, chooses to affirm the contract. This can prevent them from later claiming the contract is voidable due to coercion.

40. Can a party claim coercion if they benefited from the contract?

Benefiting from a contract doesn't automatically negate a claim of coercion, but it can make the claim more difficult to prove. Courts may consider whether the benefit was freely accepted after the coercion ended.

41. How does coercion interact with the parol evidence rule in contract disputes?

The parol evidence rule, which generally excludes external evidence about a written contract's terms, doesn't apply to claims of coercion. Evidence of coercion can be introduced even if it's not mentioned in the written contract.

42. How does coercion affect the allocation of risk in a contract?

Coercion can invalidate the normal allocation of risk in a contract. If one party was coerced, they may not be held to unfavorable terms that they would have otherwise accepted as part of the risk of contracting.

43. Can a party claim coercion if they had alternative options, even if unfavorable?

Having alternatives doesn't automatically negate a claim of coercion, but it can weaken it. Courts will consider whether the alternatives were reasonably viable given the circumstances.

44. How does the doctrine of promissory estoppel interact with claims of coercion?

Promissory estoppel, which can enforce promises even without a formal contract, generally doesn't apply if the promise was obtained through coercion. The coercion would negate the fairness element required for promissory estoppel.

45. What is the significance of timing in coercion claims?

Timing is crucial in coercion claims. Courts consider when the alleged coercion occurred in relation to contract formation, how long it lasted, and when the claim was raised after the coercion ended.

46. How does coercion affect the interpretation of ambiguous contract terms?

If coercion is proven, courts may interpret ambiguous terms against the party who used coercion, even if normal rules of interpretation would suggest otherwise.

47. Can a party be held liable for damages if they refuse to perform a contract due to coercion?

Generally, if a party can prove they were coerced into the contract, they would not be liable for damages for non-performance, as the contract would be voidable at their option.

48. What is the relationship between coercion and the duty of good faith in contract performance?

Coercion is inherently contrary to the duty of good faith in contracting. If one party coerces another into a contract, they have violated the good faith principle from the outset.

49. How does coercion affect the enforceability of liquidated damages clauses?

If a contract is found to be coerced, liquidated damages clauses within it would typically be unenforceable, as the entire contract is voidable at the option of the coerced party.

50. Can a party claim coercion if they misunderstood the consequences of not agreeing to the contract?

Misunderstanding consequences alone isn't typically considered coercion. However, if the misunderstanding was deliberately induced by the other party as part of a coercive strategy, it might support a coercion claim.

51. How does the concept of "meeting of the minds" relate to coercion in contract formation?

Coercion prevents a true "meeting of the minds," which is essential for contract formation. If one party's mind is overborne by coercion, there can't be a genuine agreement on contract terms.

52. What is the impact of coercion on choice of law or forum selection clauses in contracts?

If a contract is found to be coerced, choice of law or forum selection clauses within it would typically be unenforceable along with the rest of the contract, unless the coerced party chooses to affirm the contract.

53. How does the presence of legal representation affect claims of coercion?

While having legal representation doesn't automatically prevent coercion, it can make claims of coercion more difficult to prove. Courts may consider whether the lawyer had a real opportunity to advise their client freely.

54. Can a party claim coercion if they felt pressured by market conditions or economic necessity?

Generally, pressure from market conditions or economic necessity alone isn't considered coercion. However, if another party exploits these conditions through improper threats or actions, it might constitute coercion.

55. How does the concept of "freedom of contract" relate to coercion in contract law?

Freedom of contract, a fundamental principle in contract law, is directly undermined by coercion. Coercion negates the freedom to choose whether to enter into a contract and on what terms, which is essential to the concept of freedom of contract.