OCR A2 Law - The Law of Contract - Undue Influence (3)

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  • Created by: Majid
  • Created on: 11-05-13 22:53

Undue Influence (3)

AO2: The cases represent how the courts of Equity have witnessed situations to cover for more people who have unduley influenced.

CASE: "Royal Bank of Scotland v Etridge". The facts were very similar to "Barclays Bank v O'Brien". 7 steps were laid out:

1. The bank should be put on enquiry - this applies to husband and wifes and unmarried couples (on alert for a potential problem); 2. Take reasonable steps - there's no need for a private meeting, but a solicitor should be informed to ensure spouse understands agreement (has consequences/risks); 3.Solicitor can act for both husband/wife, unless there's a conflict of interest; 4. Solicitor must explain everything; 5. Bank has a duty to obtain confirmation that the spouse has received advice from the solicitor, and is obtained from the spouse directly; 6. Class 2A/2B seems to have been abolished as the rules will apply to all types of people in a non-commercial context; 7. Undue Influence will occur if the contract is disadvantageous i.e. if the wife acts as a surety for her husband which is disadvantageous, the wife ... has to have the transaction explained

AO2: Equity has covered all the parties who are at a disadvantage. The banks responsibility is a modest one, given their bargaining strengths, it lends huge amounts and they should be in a position to check the contract is fair. It is however, still a developing area of law and isn't past the age of child bearing.

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