Undue Influence

Question 1

What is the effect of Undue influence if found?

Answer 1

transaction will not be allowed to stand.

Question 2

When does undue influence exist?

Answer 2

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

Question 3

two types of undue influence:

Answer 3

1) overt acts of improper pressure/ coercion eg unlawful threats.

2) one party has influence/ ascendancy over the other + takes advantage of that influence / ascendancy.

Question 4

What is necessary for innocent party to establish?

Answer 4

the undue influence was a factor inducing C to enter into contract - doesn’t have to establish it as decisive factor.

Question 5

What test will apply if the behaviour is not as clear to be deceitful / fraudulent?

Answer 5

but for test -

but for the behaviour constituting undue influence, would the innocent party have entered into the contract?

Question 6

In what kind of relationship will the courts NOT ALLOW ANY argument that there was NO influence in it? (ie irrebuttably presumed)

Answer 6

eg:
- parent and child
- guardian and ward
- trustee and beneficiary
- solicitor and client
- doctor and patient

Question 7

What about parent + adult child or husband and wife?

Answer 7

They do NOT give rise to this presumption = influence will need to be positively shown.

Question 8

What proof needs to be shown for a party claiming that the other took advantage of influence or ascendancy in a relationship?

Answer 8

1) a relationship of trust + confidence (or presumably one of the categories of irrebuttable presumption); +

2) a ‘transaction which requires explanation’

Question 9

The burden is switched to …. to show….

Answer 9

Defendant ; can they prove evidence to show no undue influence?

yes - undue influence not est
no - undue influence est

Question 10

What is A transaction which requires explanation?

Answer 10

if it does not fit with what would usually be expected in the relationship concerned.

It might be a suspicious type of transaction, or be for a suspiciously high value.

Question 11

Can it still be undue influence say where a party has shown relationship of trust + confidence and a transaction which requires explanation yet the party still took independent legal advice about the transaction?

Answer 11

Yes, it may still occur. It’s possible that their consent to it is still being given only as a result of undue influence, even if they fully understand a transaction having had that independent legal advice.

Question 12

So,,, proof of undue influence may be shown from… (2 factors)

Answer 12

Relationship of trust and confidence
+
Transaction which requires explanation

Question 13

Is the relief of undue influence discretionary? What happens if innocent party has delayed making its claim?

Answer 13

Yes

As a result = court may not allow this relief bc ‘delay defeats equity’.