Undue Influence

Question 1

Explain the premise of undue influence

Answer 1

It can relieve people from liability who aren’t eligible for duress but were forced into the contract by improper purpose

Question 2

What happened if it turns out the contract was entered under undue influence?

Answer 2

Contract is voidable

Question 3

What are the types of undue influence

Answer 3

Class 1 - actual undue influence
Class 2a - presumed undue influence
Class 2b - presumed undue influence (no special relationship)

Question 4

In wha case was the types of undue influence set out?

Answer 4

Bank of credit & commerce international v Aboody

Question 5

What is class 1?

Answer 5

Actual undue influence: claim ain’t must prove D’s acts amounted to undue influence. This may include threats to relationship or continuing to badger until they consent

Question 6

What case is relevant to class 1?

Answer 6

Williams v Bayley

Question 7

Facts of Williams v Bayley

Answer 7

A man forged his fathers signature and presented it to the bank
Bank noticed and said to father and son they would prosecute unless they could reach an agreement
So they entered into a mortgage

Question 8

Outcome of Williams v Bayley

Answer 8

Agreement was set aside on grounds of undue influence as it was not entered voluntarily

Question 9

Explain class 2a…

Answer 9

Presumed undue influence: in some relationships it can be presumed there was undue influence e.g parent & child, solicit & client
ALSO
The transaction is one that can’t be readily explained by the relationship

Question 10

Explain class 2b

Answer 10

Presumed undue influence: it must be proved that one party placed their trust and confidence into another e.g employee and employer or cohabitees
This can be any relationship
Can be rebutted if proved they had free will