Chapter 5 - Vitiating factors (Part 3) - Duress and Undue Influence

Question 1

What is the general rule of law for duress and undue influence?

Answer 1

General rule of law is that a valid agreement may be made only where the parties exercise their own free will unrestrained by force or the fear of force or other improper pressure.

Question 2

What are the 2 forms of Duress? Explain them and give an example for the 2nd form.

Answer 2

1) Actual threatened physical violence to a person or his immediate family.

This includes actual or threatened physical violence to a person’s property. E.g. a threat to burn down a person’s business premises

2) Economic or commercial pressure involving
a) a coercion or compulsion overbearing the will of the victim
b) Unlawful Pressure

E.g. Case of Atlas Express v Kafco

Question 3

What is the key feature of economic duress?

Answer 3

The party in a superior bargaining position used an unlawful pressure on the other party to pressure him into making the contract

Question 4

What is undue influence?

Answer 4

Undue influence occurs when a party is induced to enter into a contract under any kind of influence which prevents him from exercising his independent judgement.

Question 5

How does the court see ‘undue influence?’ (process of undue influence)

Answer 5

It depends on whether there is a special relationship between the parties to the contract.

1) If there is no special special between the parties, the party who alleges undue influence must prove it.
2) If there is a special relationship between the parties, the law will presume the existence of undue influence in favor of the party who alleges it. The other party must prove that he did not unduly influence the first party.

Question 6

What are some examples of special relationship?

Answer 6

1) Parent (stronger party) and dependent child (weaker party)
2) Guardian (stronger party) and ward (weaker party)
3) Solicitor (stronger party) and client (weaker party)
4) Doctor (stronger party) and patient (weaker party)
5) A man (stronger party) and his fiancée (weaker party)
6) Religious Adviser (stronger party) and disciple (weaker party)

Question 7

when does undue influence not apply?

Answer 7

Between principal and agent, landlord and tenant or employer and employee

Question 8

What are steps/ process if there is a special relationship?

Answer 8

1) Yes, there is a special relationship
2) Weaker party just needs to bring factual evidence to prove the presence of special relationship. Then the law will automatically presume there was undue influence
3) There will be a legal presumption (LP)
4) The stronger party needs to bring in evidence to prove that there was no undue influence
5) Court will decide whether there was undue influence based on a balance of probabilities

Question 9

What are steps/ process if there is no special relationship?

Answer 9

If there is no special relationship, can still argue for undue influence but must have factual evidence to prove it based on a balance of probabilities.

There is no legal presumption (LP) to prove undue influence