A Hindu widow borrowed money from a lender for the purpose of filing a suit for maintenance. The lender advanced money at 100 percent rate of interest. The act of the money lender is induced by
-
coercion
-
undue influence
-
fraud
-
misrepresentation
B
Correct answer
Explanation
This is a classic case of undue influence under Section 16 of the Indian Contract Act. The money lender is in a position to dominate the will of the borrower - a Hindu widow in distress, needing funds for a maintenance suit. Charging 100% interest in such a situation is clearly unconscionable and exploitative of her vulnerable position.