1. Subs. by Ordinance XXVII of 1981.
2. PLD 1998 Lah. 132.
16. "Undue influence" defined. (1) A contract is said to be induced by "undue influence" where the relation 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 unfair advantage over the other.
(2) In particular and without prejudice to the generality of the foregoing principle, a person is deemed to be in a position to dominate the will of another---
(a) where he holds a real or apparent authority over the other or where he stands in a fiduciary relation to the other; or
(b) where he makes a contract with a person whose mental capacity is temporarily or permanently affected by reason of age, illness, or mental or bodily distress.
(3) Where a person who is in a position to dominate the will of another enters into a contract with him, and the transaction appears, on the face of it or on the evidence adduced, to be unconscionable, the burden of proving that such contract was not induced by undue influence shall lie upon the person in a position to dominate the will of the other.
Nothing in this sub-section shall affect the provisions of Section 111 of the Evidence Act, 1872.
COMMENTS
Undue influence. Principle of undue influence governing Pardanashin, ignorant and illiterate women, would hardly be applicable to agreement executed by an educated lady after reading agreement and signing it in English.3
Burden to prove that document executed by Pardanashin lady was free of undue influence is upon person who claims any right under such document. This rule is extended to illiterate ignorant lady whether or not she is Pardanashin lady. This rule of wisdom and caution thrown round Pardanashin, illiterate and ignorant women is to protect them from exploitation, duress and fraud and misrepresentation.4
Deed of special power of attorney executed by illiterate/purdah observing ladies without being given understanding as to contents and effects of document, would be invalid being violative of Section 16.5
17. "Fraud" defined. "Fraud" means and includes any of the following acts committed by a party to a contact, or with his
connivance, or by his agent, with intent to deceive another party thereto or his agent, or to induce to enter into the contract---
(1) the suggestion, as to a fact, of that which is not true, by one who does not believe it to be true;
(2) the active concealment of a fact by one having knowledge or belief of the fact;
(3) a promise made without any intention of performing it;
(4) any other act fitted to deceive;
(5) any such act or omission as the law specially declares to be fraudulent.
Explanation. Mere silence as to facts likely to affect the willingness of a person to enter into a contract is not fraud, unless the circumstances of the case are such that, regard being had to them, it is the duty of the person keeping silence to speak, or unless his silence is in itself, equivalent to speech.
3. NLR 1994 SCJ 134.
4. NLR 1994 SCJ 134.
5. NLR 1994 Civil Lah. 438.
COMMENTS
Word "fraud" used in Section 17. Its meaning as given in various law/ordinary dictionaries discussed in judgment.6
18. "Misrepresentation" defined. "Misrepresentation" means and includes---
(1) the positive assertion in a manner not warranted by the information of the person making it of that which is not true, through he believes it to be true;
(2) any breach of duty which, without an intent to deceive, gains an advantage to the person committing it, or any one claiming under him, by misleading another to his prejudice or to the prepidice of any one claiming under him;
(3) causing, however innocently, a party to an agreement to make a mistake as to the substance of the thing which is the subject of the agreement.
20. Agreement void where both parties are under mistake as to matter of fact. Where both the parties to an agreement are under a mistake as to matter of fact essential to the agreement, the agreement is void.
Explanation. An erroneous opinion as to the value of the thing which forms the subject-matter of the agreement is not to be deemed a mistake as to a matte or fact.
21. Effect of mistake as a law. A contract is not voidable because it was caused by a mistake as to any law in force in Pakistan; but a mistake as to a law not in force in Pakistan has the same effect as a mistake of fact.
Second paragraph: [Omitted by the Federal Laws (Revision and Declaration) Ordinance, XXVII of 1981].
22. Contract caused by mistake of one party as to matter of fact.A contract is not voidable merely because it was caused by one of the parties to it being under a mistake as to a matter of fact.
19. Voidalibility of agreements without free consent.
When consent to an agreement is caused by coercion by coercion, fraud or misrepresentation, the agreement is a contract voidable at the option of the party whose consent was so caused.
A party to a contract, whose consent was caused by fraud or misrepresentation, may, if he thinks fit, insist that the contract shall be performed and that he shall be put in the position in which he would have been if the representations made had been true.
Exception, If such consent was caused by misrepresentation, or by silence, fraudulent within the meaning of Section 17, the contract, nevertheless is not voidable, if the party whose consent was so caused had the means of discovering the truth with ordinary diligence.
6. 1998 AC 128.
Explanation. A fraud or misrepresentation which did not cause the consent to a contract of the party on whom such fraud was practised, or to whom such misrepresentation was made, does not render a contract voidable.
7[19-A. Power to set aside contract induced by undue influence.
When consent to an agreement is caused by undue influence, the agreement is a contract voidable at the option of the party whose consent was so caused.
Any such contract may be set aside either absolutely or, if the party who was entitled to avoid it has received any benefit
thereunder, upon such terms and conditions as to the Court may seem just.
7. See. 19-A inst. by the Contract (Amdt.) Act, VI of 1899.
