The Doctrine of Lawful Act Economic Duress: Will the PIAC Decision Impact Voidable Contracts in India?

By Vallari Dronamraju, Final Year Student at National University of Advanced Legal Studies, Kochi

Introduction

Coercion in Indian law that renders an agreement voidable, is considered as duress in English law.. In English law, a contract may be voidable on the same grounds as India (coercion, undue influence, fraud or misrepresentation) and set aside as the wrong was part of the process by which the victim’s consent was taken. The doctrine of duress will be applicable here, where one party threatens another party with a demand to be complied with and the threatened party accedes to this and enters into the contract. However, if the demand of the threatening party is unlawful (duress to person, goods, threatened breach of contract, or future[i] unlawful act), the contract may be set aside. Further, the doctrine of lawful act economic duress is a threat of serious financial consequences, that gives the threatened party no practical choice but to enter into the said contract.

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