Duress and Undue Influence

Question 1

What are the 3 types of duress?

Answer 1

1) to the person
2) To property
3) Economic

Question 2

What is duress to the person?

Answer 2

Actual or threatened violence which contributes to the decision to enter the contract.

Question 3

What is duress to goods?

Answer 3

Threat to seize property or damage it and BUT FOR the duress, agreement would not have been entered into.

Question 4

What is economic duress?

Answer 4

Illegitimate pressure whose practical effect is compulsion / lack of choice for the victim and but for the pressure, the claimant would not have entered into the contract.

Question 5

What is undue influence?

Answer 5

Where consent to transaction was produced in such a way that the consent is not an expression of the person’s free will i.e unlawful threats.

If fraudulent / deceitful = contributing factor
If not = but for.

Question 6

Where is undue influence presumed?

Answer 6

• Parent and minor child
• Guardian and ward
• Trustee and beneficiary
• Solicitor and client
• Doctor and patient

Irrebuttable presumption on influence.

Question 7

Where is undue influence not presumed?

Answer 7

• parent and adult child
• Spouses

Must show that there is a transaction requiring explanation and show unfair advantage was taken of relationship of mutual trust and confidence.

Question 8

What is the bank’s duty where they suspect undue influence?

Answer 8

1) Take reasonable steps to satisfy themselves that Cs agreement was properly obtained
2) Can rely on confirmation from solicitor
3) Provide solicitor with sufficient info to advice
4) Tell solicitor if they think C may have been misled.

Question 9

What is the solicitor’s duty for undue influence?

Answer 9

• Warn C that involvement of solicitor may be relied upon by bank
• Advice must contain explanation of documents, practical consequences, risk and remind C they have a choice.