Duress and undue influence Flashcards
Define the doctrine of duress and undue influence
with situations where free and independent consent to contract has not been given, and accordingly, the contracts concerned are not allowed to stand.
Duress
involves one party coercing another party into a contract: consent is not given freely
is a contract made under duress voidable?
no it is voidable
3 types of duress
- duress to the person
- duress to property
- economic duress
Duress to the person
duress can vitiate (make void) a contract when it amounts to actual or threatened violence
Duress to goods/property
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
Legal effect of duress
- 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
Economic duress
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.
requirements for economic duress
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
Remedy for duress
recession
If there is doubt whether to bring claim under undue influence or duress, what should claimant do?
Bring claim on both grounds
Illegitimate pressure
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.
What does it mean for victim to affirm in illegitimate pressure?
Unless the victim of duress takes immediate action once the pressure has ceased to operate, they may be taken to have affirmed the contract.
meaning of undue influence
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
2 types of undue influence
- overt acts of improper pressure or coercion
- relationship of influence/ ascendancy => of which unfair advantage is taken
Relationship of influence/ascendency
- 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
What are the relationships of irrebuttable presumption where one party has influence over the other?
- parent & child
- Solicitor & client
- guardian & ward
- Trustee & beneficiary
- Doctor & patient
When burden shifts to defendant, can they produce evidence to show there was no undue influence?
YES = undue influence not established
NO = undue influence established
How is taking advantage of influence/ascendancy proved?
Party alleging undue influence shows
- relationship of trust and confidence AND
- transaction which requires explanation
When will a bank be put on inquiry that a surety transaction might be tainted by undue influence?
Whenever one party in a non-commercial setting is standing as surety for the other party
What step should a bank take to satisfy itself that that a surety transaction is not affected by undue influence?
If the bank is aware that the spouse may have been misled, the bank should tell the solicitor of this.
What remedy will a spouse have if they are unhappy with the standard of service provided by a solicitor regarding a surety transaction?
The spouse can sue the solicitor in negligence.
