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Business Laws - Assignment

   

Added on  2021-04-21

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Running head: BUSINESS LAWSBusiness LawsName of the studentName of the universityAuthor note

1BUSINESS LAWSAnswer 1Issue The issue which has been determined by reviewing the facts of the case study is thatwhether Sam has the right to set aside the contract which he has got into with Patrick for the saleof his business.RuleThere are various situations which have been provided by contract law through which theparty has the right to set aside an existing contract. The term “set aside” a contract means thebringing of a contract to an end. The ways in which a contract can be set aside include thesituation of a contractual mistake, duress and under influence. According to McKendrick (2014) the situation of undue influence takes place when adominate parry influences the mind of a weaker party to a degree that the weaker party is notable to indulge in the process of making a decision in an independent manner. Thus a party whohas entered into a contract which has the element of undue influence to it has the right to makethe contract voidable at his or her option. The victim has the right to set aside the contract only ina situation where he acts in a prompt manner where he has realized that he was subjected toundue influence. In situation where the party is found to have delayed or accepted the situationthen the court may refuse to set aside the contract. The issue of undue influence comes to light only in situation where the parties to thecontract are in a special relationship. One of the parties to the contract who is the dominant partypossesses a special knowledge, position or skill which makes the weaker party to place his trustand confidence on the dominant party. Few examples of such relationship is that of doctor andpatient or lawyer and client.

2BUSINESS LAWSThe party who has made a claim in relation to undue influence has to make it clear beforethe court that in the given situation there was scope for domination by the other party. Undueinfluence is easy to provide in situation where a special relationship exists between the parties. Itis presumed by the law that in contract which is favorable with respect to the dominant partyundue influence has taken place. Where there is no special relationship undue influence can alsobe provided if the weaker party is able to show some desperate situation he was in when thecontract was formed such as desperate need to keep friendship. In situation where it has been shown by the party the element of undue influence may bepresent than it is the duty of the dominant party to show that no pressure had been exerted. In the case of Barclays Bank plc v. O’Brien , [1993] 4 All E.R. 417 it was held by thecourt that the bank is not able to claim the house which was provided a guarantee for loan insituation where the property was jointly owned by the spouse of the creditor and she signed themortgage document without explanation or legal advice. On the other hand in the case of Bank of Montreal v. Duguid (2000), 185 D.L.R. (4th)458 where there was no history of confidence and trust placed by the wife on the husband whiledecision making element of undue influence was not satisfied. Application In the given situation it has been provided that there was a string trust and confidencewhich Sam had on Patrick in form of both a manager and a friend. However the relationshipcannot be treated as a special relationship. However a claim from undue influence can be madewhere there is no special relationship present between the parties.

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