Contract1.6 - Undue Influence Flashcards
Where there is doubt as to whether any act of coercion is duress or undue influence
The claimant should bring actionn on both grounds
The definition of undue influence is RBS v Etridge 2002
“a person’s consent to a transaction was produced in a way such that the consent ought not fairly to be treated as the expression of their free will”
it is “impossible to be more precise or definitive”
Etridge - two types of undue influence
1) overt acts of improper pressure or coercion such as unlawful threats
2) one party has influence or ascendancy over the other, the first party takes advantage of that ascendancy = underlying influence and takes unfair advantage
Overt acts of improper pressure or coercion
Rare for undue influence, more likely to be decided under duress.
Advantage / Influence / Ascendancy in a relationship
Spouse’s share in the matrimonial home is used as security for a loan.
If trust is abused can amount to undue influence.
Irrebuttable presumption of influence
Parent & Child
Guardian & ward
Trustee & beneficiary
Solicitor & client
Doctor & patient
When is influence not presumed in relationships?
Parent & adult child
Spouses
Influence has to be positively shown
Proof of influence or ascendancy in a relationship
- trust and confidence
- transaction which requires explanation.
=> burden of proof shifts to the defendant.
Independent Advice
Does not necessarily mean that someone fully understands a transaction having received independent legal advice.
Two types of undue influence
1) Improper pressure or coercion
2) Relationship of influence /ascendancy where unfair advantage is taken
Limits on equity
- Delay defeats equity
- Inequitable conduct
If a bank or contracting party has actual notice of undue influence
- Means they are aware
- The contract will be affected
Fixed with a constructive notice of undue influence
Treated as having notice of something that it is not actually aware of
Proving spousal undue influence
1) Prove influence/ascendancy = trust and influence
2) Show explicitly how influence has been used unduly
Proving undue influence
Relationship of trust and confidence +
Transaction which require explanation
= Undue influence
If not a transaction which requires explanation, then need to explictly show how influence used unduly
