Which describes a coercive contract?

• A. A voluntary agreement with fair compensation.
• B. Forced to contribute with inadequate compensation.
• C. An agreement based on mutual trust and collaboration.
• D. A contract that includes performance bonuses.

Answer: (B)

Coercion in a contract means one party is forced or pressured into an agreement, so consent isn’t free. A coercive contract is formed under threats or significant economic pressure that compels someone to participate even though the terms are unfair. The described scenario—being forced to contribute with inadequate compensation—shows exactly that: force plus exploitation, so the consent isn’t genuine. The other scenarios describe voluntary, collaborative, or incentive-based arrangements, which involve genuine consent and mutual benefit rather than coercion. In such cases the contract can be challenged or deemed voidable because the essential element of freely given consent is missing.