Undue Influence in Contracts
- Created by: cephillips
- Created on: 06-05-14 13:51
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- UNDUE INFLUENCE
- Actual Undue Influence
- 1. C must show actual influence exists
- 2. C must show C AI was exercised
- 3. C must show the contract exists due to the influence
- Presumed Undue Influence
- RBS plc v Etridge (No. 2) [2001]
- 3 Elements required to proove
- 1. Relationship of trust and confidence
- Class 2A; (guardian/ward, doctor/patient, solicitor/client, trustee/beneficiary and religious advisor/disciple) holds presumption that one party influences another. The C only has to prove existence of the relationship.
- Clas 2B: C have to prove the existence of a relationship of trust and confidence. Husband and Wife fall here.
- 2. Something which calls for an explanation
- The gift must have been “so large as not to be reasonably accounted for on the ground of friendship, relationship, charity or other ordinary motives on which ordinary men act.” [Allcard v Skinner [1887] LR 36 ChD 145]
- 3. Can the presumption (of UI) be rebutted?
- Normal manner is through showing independent advice has been taken (Hammond v Osborn [2002]
- but this is neither always sufficient for rebutting (Etridge)
- Normal manner is through showing independent advice has been taken (Hammond v Osborn [2002]
- 1. Relationship of trust and confidence
- Third Parties
- Banks, which suspect UI, must take reasonable steps to satisfy themselves that there is none. they have to do this in every case where the relationship is between a surety and a non-commercial debot
- Etridge stated however the bank does not need to meet the spouse, and must satisfy themselves that the party has seen a solicitor.
- Banks, which suspect UI, must take reasonable steps to satisfy themselves that there is none. they have to do this in every case where the relationship is between a surety and a non-commercial debot
- Remedies
- Rescission
- 1. Affirmation of contract
- 2. Bona fide TP with no knowlegde of UI acquires goods, the victim cannot reclaim goods just compensation
- Rescission
- Actual Undue Influence
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