'A' applies to a banker for a loan at a time when there is stringency in the money market. The banker declines to make the loan except at an unusually high rate of interest. A accepts the loan on these terms. Whether the contract is induced by undue influence? Decide.
For relief on ground of undue-influence under Section 16, two requirements need to be satisfied, viz.,
(i) the party alleged must be in a position to dominate the will of the other; and
(ii) he must have exercised that domination to obtain an undue advantage.
In the given case, a bank cannot be said to be in a position to dominate the will of the borrower — the borrower having option to borrow from other banks or other sources.
Thus, contract cannot be said to be induced by undue influence.
For relief on ground of undue-influence under Section 16, two requirements need to be satisfied, viz.,
(i) the party alleged must be in a position to dominate the will of the other; and
(ii) he must have exercised that domination to obtain an undue advantage.
In the given case, a bank cannot be said to be in a position to dominate the will of the borrower — the borrower having option to borrow from other banks or other sources.
Thus, contract cannot be said to be induced by undue influence.
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