Duress and Undue Influence Flashcards
What is undue influence?
Undue influence can occur when one party exerts “unacceptable pressure” to another to encourage them to sign an agreement
What is necessary to prove “actual undue influence”
Force or coercion, as in daniel v Drew
What are the two elements for “presumed undue influence”?
A relationship of trust and confidence + a transaction which “calls for an explanation”
The relationship of trustand confidence is irrebuttably presumed in the following circumstances. What are they?
Solicitor/client; doctor/patient; parent/child;
What is the position when there is presumed undue influence with regards to a bank?
If they have actual or constructive notice of the undue influence they will be on notice
In what situation will constructive notice arise?
- Where there is a non commercial relationship between a borrower and the person giving security and capital is not advice jointly then the lender is “put on notice” RBS v Etridge
What is the definition of undue influence?
The exercise of illegitimate pressure, compelling or restrcting the choice for the victim, which is a significant cause in inducing the victim to enter the contract
(DSND v Subsea)
What case sets out which factors for illegitimate pressure?
Carillion v Felix
- Whether there was an actual or threatened breach of contract
- Whether the party was acting in good faith
- Whether the victim had a practical alternative
- Whether the victim affirmed the contract
- Whether the victim protested at the time
- Whether it was part of the “rough and tumble” of business
What is Lord Diplock’s definition of “compelling or restrcting choice for the victim” in which case?
The Universie Sentinel
“Compelling or restrcting choice for the victim” means the victim had “no practical choice but to comply”
Duress makes the contract voidable. Which case?
Opel v Mitras
What are the effects of recission?
Both parties need not perform future obligations.
Money paid or property transferred returns
