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WAS there undue influence?, Nature of relation, Class 2, Room for rebuttal…
WAS there undue influence?
will XX be relieved from the transaction
due to undue influence?
was there unfair exploitation of the
relationship such that it gives XX ascendency
or influence over YY?
Nature of relation
class 2
there is a relationship of trust and confidence
the resulting transaction is manifestly
disadvantageous to the claimant
class 1
no need for special relationship
weaker party has to prove that there
is undue influence
can sue for duress
Class 2
class 2B
deals with r/s that does not fall
within the above mentioned classes
no presumptions made based on relationship
but the court may presume one based on facts
class 2A
law deems relationship to be
of trust and confidence
Room for rebuttal
There is no undue influence
the claimant received
independent legal advice
the claimant have independence to know the
risks involved when making decisions,
circumstances of the case
did the claimant act freely and independently
in entering the contract?
bank is infected when
it entrusted the
guilty party as its agent
it had received notice of the
wrongdoing of the guilty party
Actual Notice
someone told the bank
Constructive Notice
Bank put on inquiry
Was the transaction
clearly disadvantageous to
the Claimant?
possibly lose everything?
Undue influence in banking
contract will be voidable
Bank cannot claim payment from XX
two conditions for
doctrine of
infection to apply
Creditor must be put on inquiry
the bank failed to take the reasonable steps
to minimise the risk that the wrong of
undue influence may be committed