CONTRACT LAW L4 - Duress & Undue Influence - UNDUE INFLUENCE Flashcards
What is the objective of recognising undue influence? (1)
To ensure the influence of one person over another is not abused.
What does the case of RBS V ETRIDGE 2002 demonstrate? (4)
The leading case on undue influence.
The court stated that undue influence exists where a person’s consent to a transaction was produced in a way that the consent ought not fairly to be treated as the expression of their free will.
The court stated that it is ‘impossible to be more precise or definitive’ than the definition above.
The court set out two types of undue influence; overt acts of improper pressure or coercion and relationship of influence / ascendancy - of which unfair advantage is taken.
What would many cases that fall into overt acts of improper pressure or coercion be decided? (1)
On the basis of duress.
If the behaviour constituting undue influence is deceitful what need the innocent party do? (2)
They only need to establish that undue influence is a factor in inducing the party to enter into the contract and do not need establish that it was a decisive factor.
What is the most common type of undue influence? (1)
Taking advantage of influence or ascendancy in a relationship.
What would be a common situation where someone is taken advantage of influence in a relationship? (3)
Where a husband / wife ( business owner ) wants their spouse to enter an agreement with the effect the spouse’s share in the matrimonial home is used as security for a loan to the business owner’s business. The spouse may lose their interest in the home and if the spouse has placed their trust in the business owner and they abuse their trust this can amount to undue influence.
Which relationships have an irrebuttable presumption that one party has influence over the other? (5)
Parent and child, guardian and ward, trustee and beneficiary, solicitor and client and doctor and patient.
Which relationships do not have an irrebuttable presumption that one party has influence over the other? (2)
Parent and adult child and spouses.
What must a party do if it wishes to allege it has been the victim of undue influence? (1)
It must show there is a relationship of trust and confidence and a transaction which requires explanation.
When does a transaction require explanation? (2)
If it does not fit with what would usually be expected in the relationship concerned such as a suspicious type of transaction or be for a suspiciously high value.
What may the wrongdoer argue regarding undue influence? (1)
That the innocent party received comprehensive independent advice about the transaction and therefore that they could not have been subjected to undue influence.
What happens when undue influence is proved? (2)
A contract may be set aside but this relief is equitable and therefore discretionary.
When will the court may not allow rescission? (2)
Where the innocent party has delayed making its claim because ‘delay defeats equity’ or if the claimant’s conduct has been underhand because those who come to equity must come with clean hands.
