7 Duress, Undue Influence and Unconscionability Flashcards
What must be proved for duress?
- The illegitimacy of the pressure applied.
- The illegitimate pressure induced the claimant to enter the contract.
- (Economic Duress - the victim had no choice but to submit to the demand)
What is duress to the person or property?
The threat of violence, threats against another or threats to take or damage property are illegitimate pressures - Barton v Armstrong [1976].
Duress to the person needs only be a cause of the victim’s consent, no but for requirement.
What is economic duress?
Most commonly an illegitimate pressure in the form of a threat to breach the contract if it is not modified.
It requires a but for test to be satisfied.
Commercial pressures may not be economic duress - Pao On [1980].
What is the approach to undue influence?
The abuse of relationships of trust and confidence.
Undue influence is about the defendant’s
reprehensible conduct in inducing the claimant’s agreement to the contract - Etridge no.2 [2001]
What are some difficulties with undue influence?
It is often uncertain what the defendant has done wrong.
In Allcard v Skinner [1887] the nun submitted willingly to religious requirements, not unconscientiously.
What are the 2 categories of undue influence set out in Allcard and what do they entail?
Class 1 Actual Undue Influence - the defendant positively applied pressure to induce the innocent party to contract.
Class 2 Presumed Undue Influence - the claimant was in a relationship of trust and confidence with the defendant and the transaction was manifestly disadvantageous to them.
What are some irrebuttable presumptions of the existence of a relationship of influence?
Doctor/Patient.
Solicitor/Client.
Parent/Child.
Trustee/Beneficiary.
What is the proved Relationship of Influence (2A)?
Someone relies on the guidance or advice of another.
The other was aware of the reliance and they may well obtain a benefit from the transaction.
Illness or frailty are common in these situations.
The unfairness of the transaction might suggest a proved relationship of influence - Credit Lyonnaise [1997].
What is a transaction calling for explanation relating to proved relationships of influence?
The transaction must entail an obvious disadvantage in the eyes of the reasonable person.
How can the presumption be rebutted?
The consent must be proved to be ‘full, free and informed’.
-Independent advice will often rebut the presumption but it must be adequate.
What is the remedy for undue influence?
Rescission, putting aside of the contract.
What are the requirements for an unconscionable bargain?
- The claimant is under an operative bargaining impairment, putting him at a serious disadvantage.
- The defendant exploited the claimant’s weakness in a morally culpable manner.
- The resulting transaction is manifestly improvident to the claimant.
- The claimant lacked adequate advice.
What is an example of an unconscionable bargain?
Cresswell v Potter [1968] a wife going through a divorce transferred her share in the matrimonial home to her husband without independent advice.
What are the key theories of duress?
Overborne will theory. Atiyah states that this is wrong as victims submit knowingly.
Duress is an illegitimate pressure Diplock in Universe Tankships [1983].
