Duress and undue influence

Question 1

Define the doctrine of duress and undue influence

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

Duress

Answer 2

involves one party coercing another party into a contract: consent is not given freely

Question 3

is a contract made under duress voidable?

Answer 3

no it is voidable

Question 4

3 types of duress

Answer 4

• duress to the person
• duress to property
• economic duress

Question 5

Duress to the person

Answer 5

duress can vitiate (make void) a contract when it amounts to actual or threatened violence

Question 6

Duress to goods/property

Answer 6

when there is threat to seize the owner’s property or to damage it

but for the the duress, the agreement would not have been entered into

Question 7

Legal effect of duress

Answer 7

• a contract which is voidable remains in force unless some action is take it void it.
• recession is a remedy which involves retuning the parties to their pre-contractual position

Question 8

Economic duress

Answer 8

results when one party has a lack of practical choice as to whether to enter / vary the contract, and this has been caused by illegitimate
pressure.

Question 9

requirements for economic duress

Answer 9

there must be pressure
a) where there is a lack of practical choice

b)which is is legitimate

c) which is a significant cause inducing the claimant to enter into the contract

Question 10

Remedy for duress

Answer 10

recession

Question 10

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

Answer 10

Bring claim on both grounds

Question 11

Illegitimate pressure

Answer 11

whether there has been an actual or threatened breach of contract

whether the person allegedly exerting the pressure has acted in good or bad faith

whether the victim protested at the time; and whether he affirmed and sought to rely on the contract.

Question 12

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

Answer 12

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 13

meaning of undue influence

Answer 13

exists where a person’s consent to a transaction was produced in a way such that the consent ought not fairly be treated as the expression of their free will

Question 14

2 types of undue influence

Answer 14

• overt acts of improper pressure or coercion
• relationship of influence/ ascendancy => of which unfair advantage is taken

Question 15

Relationship of influence/ascendency

Answer 15

• often where trust and confidence is placed by one party in another, but there are other examples eg a relationship with a vulnerable or dependent person

Question 16

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

Answer 16

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

Question 17

When burden shifts to defendant, can they produce evidence to show there was no undue influence?

Answer 17

YES = undue influence not established

NO = undue influence established

Question 18

How is taking advantage of influence/ascendancy proved?

Answer 18

Party alleging undue influence shows

• relationship of trust and confidence AND
• transaction which requires explanation

Question 19

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

Answer 19

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

Question 20

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

Answer 20

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

Question 21

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

Answer 21

The spouse can sue the solicitor in negligence.