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CMA Intermediate · Business Laws and Ethics · Indian Contracts Act, 1872

Mohan, an elderly man weakened by illness, is persuaded by his doctor Dr. Rao, who treats him, to agree to pay an unreasonably large sum for professional services. Under the Act, which is correct?

Undue influence exists. The doctor is in a position to dominate the will of a person weakened by illness and age, and used it to obtain an unfair, unreasonable payment, so the contract is induced by undue influence under section 16.

  1. ANo undue influence, as the doctor performed the services
  2. BUndue influence exists, since the doctor was in a position to dominate Mohan's will and obtained an unfair advantageCorrect
  3. CThe contract is void for want of consideration
  4. DThe contract is enforceable because Mohan signed it

Explanation

Section 16 deems a person in a dominating position where he contracts with someone whose capacity is affected by age, illness or distress, and Illustration (b) covers this medical attendant case. Where the transaction is unconscionable, the burden of proving no undue influence lies on the dominant party. Option D ignores this.

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