Undue Influence O Equitable doctrine. O Involves "undue" pressure on a contracting party. O Current approach is based on · Evidence of "actual" pressure · "Presumptions" from relationships · Undue influence is an equitable doctrine which, like duress, also renders a contract voidable and may be expressly proved (actual undue influence) or more commonly be established by means of an evidential presumption (presumed undue influence). · Presumed undue influence requires proof of a relationship of trust and confidence between the parties (some relationships automatically fall into this category by means of an irrebutable legal presumption) and a transaction calling for an explanation. The presumption may be rebutted, for instance if the vulnerable party had independent advice. Definition Improper pressure, falling short of duress (as duress requires a specific threat), which makes a person enter a contract that they would not otherwise have entered. Example O Andy owns his own business. O The business gets into financial difficulty. O Andy needs to raise money. O He persuades his wife, Belle, to let him use their matrimonial home (joint ownership) as security for a loan. O The business fails. O The bank (lender) seeks possession of the home. O Did Andy "unduly influence" Belle? Classes of undue influence " Actual undue influence- RBS v Etridge (2001)- Lord Nicholls- it comprises overt acts of improper pressure or coercion. · Presumed undue influence- where undue influence is presumed from relationships, and the transaction is one that requires explanation. BCCI v Aboody had the courts define these 2 classes Actual undue influence O Here, the claimant must prove, on a balance of probabilities, that in relation to a particular transaction, undue influence occurred. O There does not have to be any previous history of such influence.
O No way undue influence could have been presumed O Strong relationship between parties doesn't exist O Claimant must prove that at the time of the agreement, he was not under free will to enter it. Que William v Bayley, where the father agreed to remortgage to pay for the notes, because he was facing pressue in the form of criminal proceedings. Case examples: · BCCI v Aboody [1992] 4 All ER 955 . Williams v Bayley [1866] LR 1 HL · Libya Investment v Goldman Sachs [2016] Presumed undue influence Barclays Bank plc v O'Brien [1993] 4 All ER 417 subdivided it into 2 classes · Class 2A - presumed undue influence (arising from a special relationship between the parties) · Class 2B - presumed undue influence (no special relationship in the sense of class 2A, but a relationship of trust and confidence) O Relationships of presumed influence ie where one party is presumed to repose trust and confidence in the other party O The law automatically presumes trust and confidence in certain relationships: · Parent/minor child, doctor/patient, solicitor/client, religious leader/follower · Note: does not include husband/wife · The presumption of influence here is irrebuttable. · · Allcard v Skinner(1887) 36 Ch D 145 O Influence can also