INTRODUCTION
For a contract to be valid, all of its elements must coexist. There are a number of things that can vitiate a contract, one of which is to make the contract lose its validity. Some of the most common of them are misrepresentation, mistake, duress, undue influence, unconscionability, illegality, capacity, and lack of time, among others.
For this discussion, we will limit ourselves to just three of them. These are duress, undue influence, and a lack of capacity.
Let us start off by defining these terms.
Duress
What is duress?
Under the law of contracts, the concept of duress may serve as a vitiating factor. A contract may become voidable due to vitiating conditions, which give the affected party the choice to accept or reject the agreement. When duress satisfies specific requirements, it may be a pertinent vitiating factor in contract law.
When one party uses excessive pressure or compulsion to force the other party to engage in a contract, it is referred to as duress in the context of contract law. Threats of bodily or financial harm, as well as other illegal types of pressure, are some examples of this coercion. If evidence of duress is proven, a contract may be voidable. The party who is impacted by the contract may choose to have it set aside in order to avoid being obligated by its provisions.
The particulars of each case determine whether duress qualifies as a vitiating factor under contract law. Here are some important things to think about:
Elements of Duress
In order for the party attempting to avoid the contract to successfully assert duress as a vitiating ingredient, they must often show that they were the victim of unlawful, illegitimate threats or coercion that deprived them of their free will to make the contract. A reasonable person would be forced to take action if the threat were serious and of that kind.
- Voidable, Not Voidable: A contract becomes voidable, not void when there is duress. This implies that the party impacted by the contract may choose to accept it or reject it. The agreement is still in effect if the party who is being impacted decides to uphold it in spite of the pressure.
- Burden of Proof: Generally, the burden of proof rests on the party alleging duress to demonstrate that duress existed and significantly influenced their choice to sign the contract.
- Degree of Duress: Physical and pecuniary duress are the two categories of stress that courts frequently distinguish between. Threats of bodily danger are considered forms of duress, whereas threats of economic injury, such as unjustified withholding of payment or contract termination, are often associated with economic stress. Different criteria may be used to determine each kind of duress.
- Subjective vs. Objective Test: When determining whether duress occurred, courts may use either an objective or subjective test. Whereas an objective test determines whether a reasonable person would have been compelled in a similar situation, a subjective test looks at the real impact of the threats on the affected party.
Undue Influence
What do we mean by undue influence?
A contract may be voidable due to undue influence, which is a vitiating element under contract law. It happens when one party improperly coerces or influences the other, defeating that person’s free will and forcing them to sign a document against their better judgment. In contract law, the concept of undue influence may be pertinent and significant for the following reasons:
- Protecting Vulnerable Parties: Preserving the rights of those who are mentally unable, elderly, or in positions of trust (e.g., guardian-ward, doctor-patient) is a major goal of the undue influence doctrine. It makes sure that, in contractual ties, these people are not exploited.
- Equity and Fairness: The foundational ideas of contract law are equity and fairness. By ensuring that contracts are the product of free and voluntary decisions rather than coercion or manipulation, undue influence contributes to the integrity of contractual relationships.
- Preventing Exploitation: In the absence of the notion of undue influence, there would be a chance for those with more knowledge or authority to take advantage of others with less information or power, which may result in contracts that are oppressive and unfair.
- Maintaining Contractual Autonomy: The idea of contractual autonomy—that is, the freedom of parties to decide whether or not to join into contracts—is highly valued by contract law. Unfair pressure can lead to contracts that are voidable, which serves to protect this autonomy.
- Legal Remedies: If it is determined that undue influence contaminated a contract, the innocent party may be entitled to damages or contract revocation. This gives those who have been the victims of undue influence a legal way to seek compensation.
- Burden of Proof: The party alleging improper influence has the duty of proving that it happened in various legal systems. This implies that the person asserting the accusation has to offer proof that the other person used inappropriate influence.
It’s crucial to remember that not all pressure or influence will be considered excessive. The influenced party’s free will had to have been overridden by the improper, excessive influence. If undue influence is suspected, the courts will evaluate the particular facts of each case.
Lack of Legal Capacity
The term “legal capacity” in contract law describes a party’s ability to enter into a contract on both a legal and mental level. One of the elements that can vitiate a contract and render it void or voidable is the absence of legal ability. Since legal capacity is essential to guaranteeing that contracts are entered into equitably and voluntarily, it is relevant as a vitiating element in the law of contracts. Here are some essential details about this subject:
- Informed and Voluntary Consent: In order to guarantee that parties entering into a contract do so voluntarily and with complete awareness, legal capacity is necessary. A party may not be able to offer informed consent, and the contract may be voidable if they are mentally incapable of understanding the conditions of the agreement.
- Protecting Vulnerable Parties: The law acknowledges that some people may be more susceptible to harm and less able to fully understand the implications of a contract, such as children and people with mental illnesses. The law offers protection in these situations by allowing the vulnerable party to cancel the contract at their discretion.
- Void or Viodable: Contracts involving parties lacking legal capacity may be deemed unlawful or voidable, depending on the jurisdiction and particular circumstances. A contract that is void from the beginning, as if it never happened, is called a void contract. A voidable contract is initially enforceable but may be terminated at any time by the incompetent party.
- Minors: Contracts signed by minors—generally, anyone under a specific age, such as 18 — are frequently regarded as voidable in many legal systems. This implies that when the minor reaches the age of majority, they will be able to decide whether to accept or reject the contract.
- Mental Incapacity: Agreements made by people who are mentally incapacitated (for example, because of a mental disease or cognitive impairment) may also be voidable. In order for a contract to be voidable, it is typically necessary to demonstrate that the party entering into it was mentally incapable of comprehending the nature and implications of the agreement.
- Intoxication: In certain legal systems, agreements made by people under the influence of alcohol or drugs may also be voidable if the parties’ inebriation prevents them from understanding the conditions of the agreement.
- Public Policy: Generally speaking, the law aims to achieve a balance between safeguarding the weak and upholding contracts. Regardless of the parties’ capacity, contracts that entail unlawful activity or are against public policy may be void.
CONCLUSION
The relevance of duress, undue influence, or lack of legal capacity as vitiating elements in the law of contract depends on the specific facts and circumstances of each case. If a party can demonstrate that they entered into a contract under any of the vices of duress or undue influence or that there is a deficiency in legal capacity by one of the parties to the contract, it may be possible to have the contract declared voidable. However, the application of these three vitiating factors can be complex and may vary depending on jurisdiction and the particulars of the case.