Instances of the cases which are included in this category are relations between master and servant, income tax officer in relation to an assessee, a magistrate or a police officer in relation to an accused person.
2. Where one party stands in fiduciary relations to the other [Section 16(2) (a)]:
The relations of trust and confidence are known as finduciary relations. A party who is trusted by the other, or in whom the confidence is reposed by the other, may easily use his superior position to dominate the will of the other.
This is so because the relationship of trust and confidence gives a very good opportunity to the person, in whom trust or confidence is held, to exploit it for his personal benefits. If the consent is obtained by exploiting the trust or confidence, the consent is said to be obtained by undue influence.
These following types of relations are judicially held to be of trust and confidence:-
(i) Solicitor and client.
(ii) Doctor and patient.
(iii) Spiritual adviser and devotee.
(iv) Parents and child.
(v) Guardian and ward.
(vi) Trustee and beneficiary.
(vii) Woman and her confidential managing agents. These cases usually raise the presumption of undue influence.
3. Where one party makes a contract with the other who is in mental distress [Sec 16(2) (b]:
Sometimes, a person makes a contract with a person, whose mental capacity is temporarily or permanently affected by reason of age, illness, or mental or bodily distress. In such cases, he is in a position to dominate the will of such persons.
A person is said to be in distress when his mental capacity is temporarily or permanently affected due to any of the above causes. A person in distress can be easily induced to give his consent to a contract which may be unfavorable to him. Such contract will be voidable on the ground of undue influence.