Does this Amount to Coercion?

Hi and welcome back!

You must be wondering why I put a picture of a customer at a checkout counter in Watsons. How is it related to the title? Well, let me give to you guys some clue. Have you ever been in a situation where you were tricked or should I say 'forced' to buy something that you didn't want to buy in the first place? There you go! Now you get the main idea what I'm talking about. Perhaps, this probably only happens to women.. However, I believe sometimes, men also face this horrific situation too! Imagine how tired we are to face this kind of situation every time we were shopping. When we refused politely, they will take an advantage to persuade us more or even worst, by threatening to refuse to add points in our membership cards. All of these happened in real life and based on my own experience and others. 

The question is does this situation amount to coercion?

Generally, the law requires the parties enter into contracts with free consent. (Sec. 10 of Contracts Act 1950) So, what does amount to free consent? Section 14(a) of CA provides that when a party enter into a contract not caused by coercion. What is coercion? Section 15 provides two ways of committing coercion:-

1. The commission / threat to commit of any act forbidden by the Penal Code

2. The unlawful detention / threatened detention of any property

And in both instances, the act or threat was done with the intention of causing any person to enter into an agreement.

So, how is it? Pretty simple right? So let's break through into the scenario earlier. Whether the act of the staff which is refusing to add points in the customer's member card is an act forbidden by the Penal Code? Of course, it is not. Then, we go to the second limb, does those action by the staff considered as unlawful detention or threatened detention of any property? The member card is the property. It should be noted that the property detained may belong to any person, not necessary the victim, so long as it was done for and did cause the victim to enter into the agreement. Therefore, the act of the staff detaining the customer's property (membership card) in order for the customer to buy other products does fulfilled the elements of coercion.

However, it should be noted that when the staff did not unlawfully detained any property from the customer it does not constitute a coercion. We can referred in the case of Muthia v. Muthu Karoppa [1927]:-

An agent refused to hand over the account books of the business, at the end of his term in office, to the new agent unless the principal freed him from the liability in respect of his agency . The principal executed a release deed under which the agent was freed from liability.

Held: The release deed was voidable at the option of the principal. As he was made to execute the release deed under coercion. In this case the consent was obtained by unlawfully detaining the property (i.e., the account book) of the principal.

So, what happened to the contract if it entered by coercion?

Section 19(1) of CA states that the effect of coercion is the contract becomes voidable. According to section 2(i), when a contract is voidable there are two option given to the party coerced whether to rescind or to affirm the contract. If the contract is rescinded, the court will restore the parties to the position they were in before the contract.(Sec 65 of CA 1950)