A Signed Contract Cannot Be Simply Rescinded by one of the Parties to the Contract Under on the Ground of Dissatisfaction

A signed contract cannot be simply rescinded by one of the parties to the contract under on the ground of dissatisfaction. All agreement is contract if there are made by the free consent of parties competent to contract.  In contract, factors that may vitiate its validity are coercion, under influence, fraud, misrepresentation and mistake. These factors are stated in Section 15 to 21 of the contracts Act, 1950.

Coercion  is defined under Section 15 of the Contracts Act 1950 as “the committing , or threatening to commit any act forbidden by the Penal Code, or the unlawful detaining or threatening to detain, any property, to the prejudice of any person whatever, with the intention of causing any person to enter into an agreement.” In simple words, coercion is the threat used by one party against another for compelling him to enter an agreement. Coercion is said to have been employed when a person was forced to enter into a CONTRACT by use or under the threat of use of physical force by the other person committing or threatening to commit any act forbidden by Penal Code. For an example, in the case of Kesarmal s/o Letchman Das V.Valiappa Chettiar (1954), the court held that a transfer executed under the order of the Sultan, issued under duress of two Japanese officers during the Japanses Occupation of Malaysia was invalid. The application of this case is consent was not freely given and the transfer became voidable at the will of the party whose consent was so caused.  If there is an element of coercion in contract, the contract will become voidable at the option of the party whose consent was so caused.

According to section 16(1) of the Contracts Act 1950 “ a contract is said to be induced by ‘under 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. When a person enters into a contract under influence by another person, the contract can be rescinded on the ground of under influence.  In section 16(1), there are two very important aspects which are under influence are the domination of the will by one party over the other and obtaining an unfair advantage. Whereby in section 16(2), a person is said to be position to dominate the will of another if he holds a real or apparent authority over the other or he stand in a fiduciary relation to the other or he makes a contract with a person whose mental capacity is temporarily or permanently affected by reason of age, illness or mental or body distress. For an example, the case Inche Noriah V Shaik Allie Bin Omar(1929) , the court held that the gift should be set aside as the presumption of under influence , which is raised by the relationship proved to have been in existence between the parties, was not rebutted. The application of this case is the effect of under influence is to render the contract voidable at the option of the innocent party.  Besides that, in the case Tate V. Willamson(1866), the court held that the purchase must be aside. The defendant having been asked to give advice, stood in a confidential relationship to T. This prevented him from becoming a purchaser of the property without the fullest communication of all material information which he had obtained as to its value. The application of this case is under influence applied to every case where influence is acquired and abused or where confidence is reposed and betrayed.