In this Blog post, Abhiraj Thakur, Student NALSAR University of Law tries to answer the question “Are Surrogacy Contracts in consonance with the Indian Contract Act, 1872?” And further examines the different elements of a surrogacy agreement in light of the 1872 Act.
Surrogacy, with advancements in medical technology and increasing need-based demand, has become increasingly popular,[1] Thereby, necessitating the regulation of conduct between parties through the formation of agreements, who by the very nature of it, are likely to grow increasingly attached to the fetus or abdicate responsibility upon birth. Hence, the surrogate and intended parents seek to determine aspects like compulsory prenatal visits, coverage of medical expenses, assured guardianship upon birth,[2] inter alia, through contractual clauses, for both Commercial[3] and[4] Surrogacy.
In the Indian context, owing to lack of legislative clarity on the state’s position on Surrogacy Contracts, it becomes essential to understand the scope of enforceability of both, altruistic and commercial surrogacy contracts concerning the Indian Contract Act, 1872.
Element Of Consent – Section 14
The essentiality of consent[5] being free and unvitiated for any contract as defined and laid down in Sections 13 and 14 of the Indian Contract Act 1872, becomes highly relevant in the Indian context wherein Commercial Surrogacy has not been deemed illegal.
Testing Consent against Section 16(2)
In India, often poor women in vulnerable situations ‘consent’ to such agreements to escape poor economic conditions or are pressurized by their relatives to carry the child of a couple incapable of reproducing.[6] In the former case, unless a presumption of inequality of bargaining power[7] or other forms of undue influence[8] is raised which goes unrebutted, the consent is held free. Mental distress caused by the need for money is held not to be sufficient to negate consent by the courts.[9]
Whereas in the latter, if the facts indicate that the blood or marital relationship was such that possibility of dominance existed, a presumption of undue influence is raised. This implies that it will be presumed that the ones seeking the contract to be enforced in fact used their position to dominate the surrogates’ will[10] and by Section 19-A, the surrogate will have the right to recede the contract.
Inability to Gauge Consequences- A Voluntary Risk
Further, it is argued that surrogacy, due to its very nature, leads to changes in the will to part with the child. Consent is necessarily predicated upon the ability of a party to comprehend the nature and consequences of the act that they wish to undertake. Consent which is also indicated by intention needs to be present continuously in a long term contract.[11] The implications of giving up a baby are incomprehensible by the surrogate at the time of concluding the contract. In the landmark Re Baby M case[12], the court noted,
“Under the contract, the natural mother is irrevocably committed before she knows the strength of her bond with her child. She never makes a totally voluntary, informed decision, for quite clearly any decision before the baby’s birth is, in the most important sense, uninformed, and any decision after that, compelled by a pre-existing contractual commitment”.[13]
Hence, the surrogate may during the gestation period, develop deep attachment and undergo a ‘change of heart’.[14] This line of argumentation presumes that all surrogates lack the ability to give consent as they 
are deciding to engage in an activity, the future consequences of which are unassessed, but known.
However, the doctrine of freedom of contract[15]– a touchstone of classical and modern contract law theories and the basis for state enforcement of private contracts necessarily presumes that parties, by deciding the law for themselves, undertake the risk of sticking to it despite a ‘change of the heart.’ To entail oneself personal autonomy, parties face the trade-off of potential regret.[16] This doesn’t create any rational differentiation for surrogacy contracts from other long-term contracts.
Unconscionability Principle- Section 16(3)
The recognition of this freedom principle merely invalidates a change in the decision as an excuse for non-performance; it, however, does not prevent the court from the protection of weaker parties especially in light of unequal bargaining power.
Section 16(3) applies to instances that the courts determine to be ‘unconscionable’ by the facts.[17] In the particular case of surrogacy contracts, this can be adjudged by procedural matters such as inability on the part of the surrogate to read the terms or harsh exemption clauses preventing liability of the fertility clinic, etc. It can also be derived by substantive elements like exceptionally low payment or some explicitly harsh terms. These terms can be indicative of exploitation of the vulnerable, cases that often arise in India being a popular destination especially for foreign parties due to the availability of cheap surrogates, and can be grounds for deeming undue influence being present.[18]
However, it is important to not characterize the very nature of surrogacy as an unconscionable bargain, an argument often advanced by feminist scholars opposing such contracts.[19] Since such an argument stands against the fundamental premise of a contract and disregards truly altruistic forms of surrogacy and cases when women choose to opt into it to experience the joys of childbearing or gratuitously.
Legality of Object – Section 23
The question whether surrogacy contracts are forbidden by any law or opposed to public policy needs to be answered separately.
Commercial Traditional Surrogacy – Forbidden by Law?
The law does not expressly recognize surrogacy, but views traditional surrogacy[20] As the adoption of the surrogate’s child by the intended parents, so, it needs to be examined in light of the Hindu Adoptions and Maintenance Act, 1956. Section 17 of the said Act expressly forbids the payment of any sum or any rewards in consideration for adoption. In Baby Manji Yamada v. The Union of India[21], a landmark Indian surrogacy case, the position taken by the courts was that such an arrangement was viewed as adoption under the law. In Jan Balaz v. Anand Municipality[22] As well, the German couple- intended parents, in this case, were only allowed to take their twins to Germany, who were born out of surrogacy in India, upon completion of adoption formalities. Hence, in commercial traditional surrogacy contracts, the effect is one of committing an act forbidden by law, thereby making the object illegal.
However, courts in decisions above, adopted a pro-contract and pro-commercial approach, indicating that the legislature brings surrogacy contracts in the realm of Indian Contracts Act while issuing further guidelines, so as to not affect their enforceability, but merely regulate them. More recently, in P Geetha Nagar v, Kerala Livestock Development Board[23], the court clarified that surrogacy is not illegal in India and noted India’s significance as a ‘surrogacy destination.’ The courts have recognized the immense economic gain accruing.
Thereby, while a strict reading of the law prohibits such contracts, the precedent has upheld them even in light of Section 23.
Public Policy Considerations
A concern raised by many objectors is that altruistic surrogacy in itself is an immoral bargain as it fails to serve the best interests of the child since the baby is separated from the birth mother, and commercial surrogacy, specifically amounts to ‘baby-selling’ by commodifying and devaluing women and children.[24] The Supreme Court gave these public policy considerations significant weight in the Baby M case[25], and the court felt that there was inherent something harmful about the practice of surrogacy.[26]
Under the Indian Contracts Acts, Section 23 lays down that an agreement is unlawful if it is opposed to public policy. The Supreme Court has interpreted this to apply to agreements injuring public interest or public welfare.[27]
However, there is far less tangible evidence of a material link between permitting surrogacy and public interest, especially considering that the essence of the surrogacy contract lies in a dealing involving two parties affecting their rights on the child. While it is much desired that the courts weigh the best interests of the child, the contract in itself falls short of becoming a public policy concern. Further, it ‘s hard to fit such contracts in any of the recognized ‘pigeon-holes’[28] Of circumstances opposing the public policy.[29]
Indian courts have as well upheld all forms of surrogacy contracts, and in fact recognized reproductive rights as part of the right to privacy.[30] The Universal Declaration of Human Rights in Article 16(1) recognizes the right to marry and found a family. However, in Jan Balaz v. Anand Municipality[31], Justices K.S. Radhakrishnan and A.S. Dave stressed on the necessity of special legislation to govern several issues of public welfare and policy importance that arise in such disputes, like rights of a surrogate mother, guardianship, responsibilities of the fertility clinic, etc. Need for regulation is pressing, but the position of the law is that that, in itself, does not affect the enforceability of surrogacy contracts.
Thus, we see there is a cause for respecting surrogacy contracts as they pass the tests for the existence of essentials of a contract. While ubiquitous claims of disproportionality and inability to gauge consequences exist, these fall short of being specific to surrogacy contracts and fail to create cause for disrupting the system of contractual obligations. These contracts stand to deserve full enforceability since the law needs to respond to new social patterns, rather than abandoning them, and eventually stagnate.
Footnotes
[1] DasGupta, S. (n.d.). Globalization and Transnational Surrogacy in India. Lexington Books 2014, United Kingdom.
[2] Surrogacyindia.com. (2016). Documentations, Contracts at SurrogacyIndia. [online] Available at: http://www.surrogacyindia.com/Contracts.html [Accessed 9 Apr. 2016].
[3] Surrogacy refers to an agreement between the parties wherein the surrogate is given money for merely carrying the baby. See: Fertilityconnections.com.au. (2016). Surrogacy – Fertility Connections. [online] Available at: http://www.fertilityconnections.com.au/surrogacy/ [Accessed 9 Apr. 2016].
[4] Altruistic Surrogacy refers to surrogacy without any financial gain to the surrogate for carrying a child, only ‘out of pocket’ expenses like medical expenses, travel and time out of work are covered. See: Fertilityconnections.com.au. (2016). Surrogacy – Fertility Connections. [online] Available at: http://www.fertilityconnections.com.au/surrogacy/ [Accessed 9 Apr. 2016].
[5] Section 10, Indian Contract Act 1872.
[6] Braho, H. 2015. Motherhood Surrogacy: Progress or Exploitation?. European Journal of Sustainable Development, 4(2).
[7] Lloyds Bank v. Bundy, 1975 1 QB 326.
[8] Section 16, Indian Contract Act 1872
[9] Raghunath Prasad v. Sarju Prasad, AIR 1924 PC 60.
[10] Lancashire Loans Ltd. v. Black, 1934 1 KB 380.
[11] Margalit, Y. Redefining Parenthood – From Genetic Essentialism to Intentional Parenthood. SSRN Electronic Journal.
[12] 537 A.2d 1227, 109 N.J 396.
[13] Id at para 100, p.434.
[14] Margalit, Y. (n.d.). In Defense of Surrogacy Agreements: A Modern Contract Law Perspective. SSRN Electronic Journal.
[15] Pound, R. 1909. Liberty of Contract, 18 YALE L. J. 454.
[16] Schuck, P. 1988. Some Reflections on the Baby M Case, 76 GEO. L.J. p.1793.
[17] Wajid Khan v. Raja Ewaz Ali Khan, 1891 18 IA 144.
[18] A. Schroeder Music Publishing Co. v. Macaulay, 1974 1 WLR 1308.
[19] Andrews, L. 1988. Surrogate Motherhood: The Challenge for Feminists. The Journal of Law, Medicine & Ethics, 16(2), p.72.
[20] Traditional Surrogacy, differing from Gestational Surrogacy, involves the use of the surrogate mother’s egg to procreate.
[21] 2008 13 SCC 518.
[22] Civil Appeal No. 8714 of 2010.
[23] WP(C).No. 20680 of 2014.
[24] Wolf, S. 1992. Surrogate Motherhood: Politics and Privacy. Larry Gostin. Ethics, 102(3), p.671.
[25] Re Baby M, 537 A.2d at 1247.
[26] Id at 1248, 1250.
[27] Ratanchand Hirachand v. Askar Nawaz Jung, 1991 3 SCC 67.
[28] These include contracts of marriage brokerage, the creation of perpetuity, interference with the administration of justice, wagering contracts, against friendly foreign states, trade with the foreign enemy, restraint of trade, price escalation, and interest clauses, among others.
[29] Fender v. John Mildmay, 1938 AC 1.
[30] B. K. Parthasarthi v. Government of Andhra Pradesh, AIR 2000 AP 126.
[31] AIR 2010 Guj 21.
The post Surrogacy Contracts And The Indian Contracts Act appeared first on iPleaders.