Undue Influence PDF

Preview

Summary

contract notes exam...

Description

Nick Dowse

Undue Influence – Pg 111 SG

Undue Influence – Structure of Answer 1.

2.

Undue influence involves one person who occupies a position of ascendancy or influence over another improperly using that position for the benefit of himself or someone else, so that the acts of the person influenced cannot be said to be his voluntary acts (Johnson v Buttress). There are said to be recognised classes of undue influence (Allcard v Skinner) a. Class 1: actual undue influence i. These elements must be shown by the party seeking to rely on the plea: 1. one party to the transaction had the capacity to influence the other 2. that influence was exercised 3. its exercise was undue; and 4. its exercise brought about the transaction (Bank of Credit v Aboody) b. Class 2: presumed undue influence i. Class 2A: recognised relationships 1. Most relationships in this category are widely recognised, such as: a. solicitor and client (McPherson v Watt) b. trustee and beneficiary (Dougan v MacPherson) c. doctor and patient (Bar-Mordecai v Hillston) d. parent and child (Phillips v Hutchinson) i. does not apply to child -> parent ii. does not apply if child is emancipated from parent (Lamotte v Lamotte) e. spiritual adviser and devotee (Norton v Relly) f. man and fiancé (Zamet v Hyman) ii. Class 2B: classes attracting presumption 1. can arise in any relationships where fiduciary characteristics are seen (Johnson v Buttress) 2. court looks at: a. standard of intelligence, education, character, personality, age, state of health, any blood relationships, lack of experience in business affairs of claimant b. length of acquaintanceship and intricacy of their business affairs c. strength of character and personality of the dominant party; and d. the opportunity afforded the dominant party to influence the claimant in business affairs

Page 1 of 2

Nick Dowse

3.

Undue Influence – Pg 111 SG

(Union Fidelity v Gibson) 3. eg banker and customer relationship does not arise a presumption of undue influence under class 2A, but may do so under class 2B (National Westminster Bank v Morgan) c. In either of the classes, the presumption can be rebutted: i. By proving that the trusting party: 1. knew and understood what they were doing; and 2. was acting independently of any influence arising from the ascendancy (Lancashire Loans v Black) Remedies a. The contract is rendered voidable, therefore enabling rescission of the contract. i. Right might be lost in certain circumstances, such as: 1. affirmation 2. delay in seeking rescission 3. 3rd party interest in subject matter; or 4. impossibility of restituio in integrum. b. If the right to recsission is lost, court may still order equitable compensation (Mahoney v Purnell).

Page 2 of 2...