A Hindu widow borrowed money from a lender for the purpose of filling 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
Undue influence (Section 16 of Indian Contract Act) occurs when one party dominates the will of another through a relationship of trust and confidence. A money lender lending at 100% interest to a vulnerable widow for a basic need (maintenance suit) exploits this fiduciary relationship. The unconscionable interest rate and the widow's disadvantaged position clearly show the lender abused their position of influence over her.