undue influence
what was undue influence developed by
equity
what is undue influence
An equitable doctrine that invovles one person taking an advantage of a position of power over the other
this inequality of ppower between the aprties can vitiate one persons consent as they are umanle to freely exercise their independent will
it takes the form of improper pressure short of duress on a person, resulting in them being ata manifest disadvantage
so, undue influence is where, one aprty usses improper pressure, short of udress, on a person, resulting in them being at a manifest disadvtnage in relation to some transcation
•It takes the form of improper pressure short of duress on a person resulting in their being at a manifest disadvantage in relation to some transaction
involves taking advantage or explotiing a relationship
Allcard v Skinner defines undue infliuence as
➤ some unfair and improper conduct
➤ some coercion from outside
➤ some overreaching
➤ some form of cheating, and generally, though not always
➤ some personal advantage obtained by the guilty party
undue influence - effects in equity
when undue influence is found, equity grants relief form that contratc making it voidable
equity reocgnised 2 forms of conduct that may giev rise to undue influence - 1
acts of improper pressur eor coercisoon such as unlawful threats
A relationship between 2 persons where one person has a degree over the other but without overt pressure
üLord Nicholls in Royal Bank of Scotland v Etridge (No 2) (2001) UKHL 44 stated that undue influence is:
'one of the grounds of relief developed by the courts of equity as a court of conscience. The objective is to ensure that the influence of one person over another is not abused.'
barclays bank v obrien
**In essence, the decision in this case established that banks and other lenders have a duty to ensure that spouses providing security for their partner's debts fully understand the nature and implications of the transaction. If this duty isn't met, the transaction can be set aside, providing protection to the spouse who may have been vulnerable or unaware of the risks involved.
o Due to the nature of the relationship, the bank had a duty to take reasonable steps to ensure that married women understood the nature and effect of the transaction and that the consent given was true and informed
oThe bank had failed in this duty and the charge was not enforceable beyond £60,000
**
two categories of undue influence
actual undue influence
presumed undue influence
actual undua influence arises where there is a direct evidence of improper pressure or coercian being applied to a peson so as to influence their free will in relation to a transcatioon
genuine presumption - protected relationshiops
Evidential presumption - outside - protected relatiobshop
Bank of Credit and Commerce International SA v Aboody [1990] 1 QB 923 Slade LJ set out the requirements to establish actual influence:
the buden of proof is on the claiamtn to show that
the aprty in question has the capacity to influence him or her
the influence was e xervcised
the exercise of the ingluence was undue
the influence caused him or her to enter into the trasnsaction