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CA Foundation · Business Laws · The Indian Contract Act, 1872

Ravi's neighbour Sameer points a pistol at him and threatens to shoot unless Ravi signs an agreement to sell his plot to Sameer at a very low price. Ravi signs out of fear. Under the Indian Contract Act, 1872, what is the status of this agreement?

The agreement is voidable at Ravi's option. Threatening him with a pistol is coercion, because it involves an act forbidden by the Indian Penal Code. Consent obtained through coercion is not free, so only the victim, Ravi, can choose to rescind the contract or affirm it.

  1. AVoid, because no consent was given
  2. BVoidable at the option of Ravi, as consent was caused by coercionCorrect
  3. CValid, because Ravi actually signed it
  4. DVoidable at the option of Sameer

Explanation

Threatening to commit an act forbidden by the Indian Penal Code, such as shooting, is coercion. Consent caused by coercion is not free, so the contract is voidable at the option of the party whose consent was so obtained, namely Ravi. Signing does not make it valid, and Sameer, the wrongdoer, has no right to avoid it.

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