Important points of distinction between coercion and undue influence are as follows:
Both, coercion and undue influence vitiate consent and make the consent of one of the parties to the contract unfree. But the following are the points of distinction between the two:
1. In coercion, the consent of the aggrieved party is obtained by committing or threatening to commit an act forbidden by Indian Penal Code or detaining or threatening to detain some property unlawfully. While in undue influence, the consent of the aggrieved party is affected from the domination of the will of one person over another.
2. Coercion is mainly of a physical character involving mostly use of physical or violent force. Whereas undue influence is of moral character involving use of moral force or mental pressure.
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ADVERTISEMENTS:
3. There is no presumption of coercion by law under any circumstance. The burden of proof that coercion was used lies on the party whose consent was so caused. In the case of undue-influence, however, there is presumption as to the same in the case of certain relationships. In these cases there is no need of proving the use of undue-influence by the party whose consent was so caused.
4. While in the case of rescission of a contract procured by coercion, any benefit received by the aggrieved party has to be restored under Section 64 of the Contract Act; in the case of rescission of a contract procured by undue influence, as per Section 19-A, the Court has discretion to direct the aggrieved party for restoring the benefit whether in whole or in part or set aside the contract without any direction for refund of benefit.
5. The party exercising coercion exposes himself to criminal liability under the Indian Penal Code, besides an action on contract. There is no criminal liability in case of undue-influence.