Duress and undue influence

Question 1

Define undue influence and duress.

Answer 1

with situations where free and independent consent to contract has not been given, and accordingly, the contracts concerned are not allowed to stand.

Question 2

Is a contract made under duress enforceable?

Answer 2

No, they are voidable.

Question 3

What are the 3 types of duress?

Answer 3

1- duress to person
2- duress to property
3- economic duress

Question 4

Define duress to person.

Answer 4

threaten of violence
- Amounts to one factor influencing the decision to enter into the contract (need not be decisive)

Question 5

Define duress to goods and property.

Answer 5

threat to seize the owner’s property or to damage it
- But for the duress, the agreement would not have been entered into

Question 6

Define economic duress.

Answer 6

There must be pressure,
(a) whose practical effect is that there is a compulsion on, or a lack of practical choice, for the victim,
(b) which is illegitimate and
(c) which is a significant cause inducing the claimant to enter into the contract.

Question 7

What is the remedy to duress?

Answer 7

Rescission

Question 8

Define the term ‘lack of practical choice’ within economic duress.

Answer 8

Pressure must result in a lack of practical choice for the victim.

Question 9

What factors does the court take into account when determining if there has been illegitimate pressure within economic duress?

Answer 9

-Has there been a threatened breach of contract?
- pressure applied in good or bad faith?
- did victim protest
- did victim affirm?

Question 10

What does it mean for victim to affirm in illegitimate pressure?

Answer 10

Unless the victim of duress takes immediate action once the pressure has ceased to operate, they may be taken to have affirmed the contract.

Question 11

If there is doubt whether to bring claim under undue influence or duress, what should claimant do?

Answer 11

Bring claim on both grounds

Question 12

Define undue influence.

Question 13

What are the 2 types of undue influence?

Answer 13

1- Overt acts of improper pressure or coercion (e.g. unlawful threats). Overlap with duress.
2- taking advantage of relationship influence/ascendancy

Question 14

What is overt acts of improper pressure or coercion?

Answer 14

similar to duress, influence is of a deceitful / fraudulent nature

Question 15

What are the relationships of irrebuttable presumption where one party has influence over the other?

Answer 15

• parent & child
• Solicitor & client
• guardian & ward
• Trustee & beneficiary
• Doctor & patient

Question 16

How is taking advantage of influence/ascendancy proved?

Answer 16

• Party alleging undue influence shows
• relationship of trust and confidence AND
• transaction which requires
  explanation

Question 17

Why is the case Barclays Bank plc v O’Brien significant in regard to the doctrine of undue influence?

Answer 17

It provided guidance for lenders concerning how they might avoid being fixed with notice of a contracting party’s undue influence

Question 18

When will a bank be put on inquiry that a surety transaction might be tainted by undue influence?

Answer 18

Whenever one party in a non-commercial setting is standing as surety for the other party

Question 19

What step should a bank take to satisfy itself that that a surety transaction is not affected by undue influence?

Answer 19

If the bank is aware that the spouse may have been misled, the bank should tell the solicitor of this.

Question 20

What remedy will a spouse have if they are unhappy with the standard of service provided by a solicitor regarding a surety transaction?

Answer 20

The spouse can sue the solicitor in negligence.