Undue Influence in Contract Law

This briefing paper discusses the meaning, provision, rules, and ambiguities related to undue influence in contract law. It explains the different types of undue influence and the circumstances in which it is deemed to occur. The paper also highlights the ambiguity in the principles of undue influence and its similarity with coercion, professional responsibilities, and love and affection. Finally, it suggests ways to prevent undue influence and protect vulnerable parties.

qwertyuiopasdfghjklzxcvbnmqwe
rtyuiopasdfghjklzxcvbnmqwertyu
iopasdfghjklzxcvbnmqwertyuiopa
sdfghjklzxcvbnmqwertyuiopasdfg
hjklzxcvbnmqwertyuiopasdfghjkl
zxcvbnmqwertyuiopasdfghjklzxcv
bnmqwertyuiopasdfghjklzxcvbnm
qwertyuiopasdfghjklzxcvbnmqwe
rtyuiopasdfghjklzxcvbnmqwertyu
iopasdfghjklzxcvbnmqwertyuiopa
sdfghjklzxcvbnmqwertyuiopasdfg
hjklzxcvbnmqwertyuiopasdfghjkl
zxcvbnmqwertyuiopasdfghjklzxcv
bnmqwertyuiopasdfghjklzxcvbnm
qwertyuiopasdfghjklzxcvbnmqwe
rtyuiopasdfghjklzxcvbnmrtyuiopa
Running Head: BUSINESS AND CORPORATION LAW 0
Obligation Contract
5/19/2018
Student’s Name

COMMERCIAL LAW 1
Contents
Briefing Paper..................................................................................................................................2
Introduction......................................................................................................................................2
What undue influence is?.................................................................................................................3
Ambiguity in the rules of Undue influence.....................................................................................6
Whether the rules of undue influence provide sufficient protection...............................................9
Suggestions....................................................................................................................................11
Conclusion.....................................................................................................................................13
Bibliography..................................................................................................................................15
Cases 15
Articles/Books/Journals 15
Others 16

COMMERCIAL LAW 2
Briefing Paper
This Briefing paper has been prepared for the Board of Directors of the Charity and consist the
issues and suggestions related to undue Influence.
Introduction
Certainly, Undue influence is a lead issue in today’s time. Not only in business transactions but
also in other fields such as inheritance, will, and Probates the same exists1. In order to develop a
briefing paper on this subject, this is necessary to mention that the issue of undue influence is
mostly involved in contracts. This is to state that undue influence is a curse for the independent
business society. This is the reason due to that; parties of the cases are not free to take their
decisions. This concern is not limited up to an area or a country but affect the whole world.
Characteristics and situations of Undue Influence are already defined. Further, Undue influence
has some of it is kinds and principles that are mentioned in the further discussion. Many of the
cases related to the concern have reported in recent years. It is the liability of the authorities to
prevent such issue and cases. Although, many of the rules have made to prevent the same yet this
issue requires a better attention and laws. Unlike to other issues, this issue is not in general in
nature and affects some particular and identified groups of society. In addition to the
commercial, the same also has social nature and impacts. While making a briefing paper on this
concern, one needs to know that what exactly undue influence means. This subjective briefing
paper cover and consist of the meaning, provision, rules, their ambiguities and suggestion related
to undue influence.
1 Weisbord, R K, Horton, D and Urice S K Wills, Trusts, and Estates: The Essentials.(Wolters Kluwer Law &
Business, 2018, Page no. 202)

COMMERCIAL LAW 3
What undue influence is?
In a general language, Undue Influence is a situation in that one-person holds an influencing
position or relationship with other person and due to such position, the other person binds to take
a decision without his/her own will and consent2. In the language of jurisprudence, undue
influence is an equitable doctrine where one person takes advantage of his/her powerful or
superior position over another party3. It can also explained as that where a party of the
transaction does not take decision according to his/her own wish but the another party of the case
influences the choices and decision of first party, then such as situation called “Undue
Influence”4
One can commonly find the Undue influence in cases of Contract law and Probate Law. Which
relationship will be treated as the relationship of influence has defined in the case of Johnson v
Buttress5. In the cited case, the lead issue was the approach of presumed and actual undue
influence. Both Actual and Presumed Undue Influences are defined hereunder:-
1. Actual Undue Influence: - In such kind of influence, a well-defined relationship exists
between the plaintiff and defendant and it is proven that the defendant carries an
influence over the plaintiff.
2. Presumed Undue Influence: - Not similar to actual undue influence, in the case of
presumed undue influence, parties do not have a defined relationship but due to the
2 The Law dictionary, what is Undue Influence (2018) < https://thelawdictionary.org/undue-influence/>
3 Peck Law Group, What is considered the Basis of Undue Influence? (2013) < https://www.premierlegal.org/what-
is-considered-the-basis-of-undue-influence/>
4BusinessDictionary, Undue Influence (2018) < http://www.businessdictionary.com/definition/undue-
influence.html>
5 [1936] HCA 41; 56 CLR 113

COMMERCIAL LAW 4
nature of relationship, existence of influence can be assumed6. These are the cases where
defendant carry deemed relation of influence.
Presumed Undue Influence is further defined in two categories, one is known as first Sub group
and another one knows as second sub group7. These categories have been made according to the
nature of the relationship between the parties.
In the first group, the following relationships include-
• Parent-Child
• Doctor-Patient
• Religious adviser- Members of the flock
• Government- Citizen
• Solicitors- Clients
These cases are those where a relationship exists between the parties that have the nature of
influence. In such situations, the burden of proof will be on the party that holds the position of
influence, it means in case of any dispute the first party such as a parent, doctor, solicitor and so
on will be responsible to prove that they did not use their position in an adverse manner. Further,
the second group consists of those relationships of the parties, which does not cover in the first
group category. These categories involve the relationship where a factor exists, that can lead the
influence8.
6 E-law resources, Undue Influence (2018) < http://e-lawresources.co.uk/Undue-Influence.php>
7 Sullivan J O and Hilliard J The Law of Contract (Oxford University Press, 2016, Page no. 281)
8 Law Explorer, Undue Influence (2016) < https://lawexplores.com/undue-influence/>

COMMERCIAL LAW 5
While discussing the issue of Undue Influence, this is also necessary to study that what are the
situations where such Undue Influences exists. It is to state here that whenever a person uses
his/her position by changing other party’s decision for the personal benefits then such influence
exists. In Contract law, mostly a person does an act of Undue influence where:-
1. He/she holds a fiduciary relationship with another party in the case.
2. Where another party in the case is an unsound mind.
The doctrine of Undue Influence deemed to occur in those cases where one party has an emotion
of fear, respect, trust, or confidence for other party9. In this situation, such other party can misuse
his/her position in a transaction and can become defendant of a future case. For instance
relationship of a father and child consist, love, respect, and trust. Further relationship of a doctor
and patient consist confidence. As mentioned earlier that apart from the defined relationship,
some relationship is also there in that one party can be in a position to perform undue influence
over another party of the transaction.
In order to conclude the inquiry titled “what are the circumstances in which undue influence is
deemed to occur,” this can be stated that in a situation where one party holds the relationship of
trust with others10. Further, in cases where one party holds a superior position and for this reason
the same can dominate the other party then also it will be treated as undue influence. Although
apart from some of the relationships, not all relations are defined, yet to say that circumstances
and nature of the relationship are defined in the law, where undue influences will be deemed to
exist in cases of Contract Law as well as others.
9 Miler, C A Elder Abuse and Nursing:What Nurses need to know and Can do (Springer Publishing Company, 2016,
page no. 155)
10Nievod, A Undue Influence in Contract and Probate Law (2018) <
http://www.csj.org/pub_csj/csj_vol10_no1_93/undue_influence.htm>

COMMERCIAL LAW 6
Ambiguity in the rules of Undue influence
The concept of undue influence is relatively old, and the principles of the same provide a defense
to people who are weak and vulnerable by allowing them to set aside a contract or will.
However, many experts have argued that the principles of undue influence are not clear which
resulted in creating ambiguity in a case, which affects the judgment of the court11. It can be seen
from various cases that ambiguity exists in the principles of undue influence, which resulted in
negatively affecting the innocent party or providing unfair advantages to another. Following are
different factors that show that the principles of undue influence are not clear and ambiguity
exist in them.
 Lack of proper definition
Various provisions exist regarding the doctrine of undue influence, however, in Allcard v
Skinner12 case, Lindley LJ provided that no court has ever attempted to define the doctrine of
undue influence. Different definitions and interpretations are made by courts, which are based on
the circumstances of the case. The basic principle provides that if parties have entered into a
contract based on undue influence, then such contract will be rendered void. Due to lack of a
proper definition, courts are required to provide judgment based on the circumstances of the
case, which leads to different interpretations13. The court has to provide its judgment based on
the principle of natural justice which affects the interest of the parties and their right to remedy.
For example, in BCCI v Aboody14 case, it was held by the court that in order to prove actual
undue influence, the parties are required to show that the issues which rose in the transaction of
11 Anita B Undue Influence (Penguin Books, 2016).
12 (1887) 36 Ch D 145
13 Carla S. Why The Testamentary Doctrine Of Undue Influence Should Be Abolished. (2010) Kansas Law Review.
58(2), Page no. 245
14 (1990) 1 QB 923

COMMERCIAL LAW 7
the case are to the manifest disadvantage of the ‘innocent party’. However, this principle was
overruled by the judgment given by House of Lords in CIBC Mortgages PLC v Pitt15 case. It was
held that it is unnecessary for the victim party to prove in the case of actual undue influence that
the transaction was the manifest disadvantage. It shows that ambiguity in the principles that exist
due to lack of a proper definition affects the interest of innocent parties.
 Similarity with coercion
The doctrine of undue influence is similar to the principle of coercion, which creates confusion
for the court while providing remedies to the parties. Due to mistaken of a fact, it becomes
difficult for the court to identify whether to implement the principle of coercion or undue
influence16. Furthermore, it is also confusing for solicitors to understand whether to implement
the principles of undue influence or coercion due to lack of proper definition. Porter J provided
in Mutual Finance Ltd v John Wetton & Sons Ltd17 case that a much wider relief is given to the
party in case a contract is set aside based on the principle of duress or coercion. The relief of an
innocent party is affected if the court failed to identify between coercion and undue influence.
Although, many judgments have made the difference between coercion and undue influence
more clear, however, ambiguity still exists in their application.
 Contradiction between undue influence and professional responsibilities
Due to the lack of proper definition, the line between undue professional responsibilities is very
thin which affects many professionals. It is difficult for the court to identify whether the decision
the actions of the defendant comes under the definition of professional responsibility or undue
15 (1994) 1 AC 200
16 Emily L et al. Misconceptions About Coercion And Undue Influence: Reflections On The Views Of IRB
Members. (2012) Bioethics. 27(9), Pages 500-507
17 (1937) 2 KB 389

COMMERCIAL LAW 8
influence18. On the other hand, many professionals take unfair advantage of their position to
influence another party and save themselves from the charges based on professional
responsibility principles.
 Contradiction between undue influence and love and affection
Similarly, as a professional responsibility, it is difficult to understand the actions, which are
performed, based on love and affection. The court finds it difficult to understand the difference
between acts under love or affection and undue influence, especially in probate law19. For
example, if a will is prepared by a party in which he has given all his property to a single
beneficiary out of love and affection, then it is difficult for such party to prove this in the case
after the death of such person. On the other hand, many people take unfair advantage of a will
based on love and affection, which negatively affect an innocent person.
 Remedies for damages are not clear
There is no specific remedy or punishment exists in English law regarding undue influence and
the court provides remedies to the innocent party based on the circumstances of the case. Due to
the lack of proper definition, it becomes difficult for the court to maintain consistency while
providing remedies to the parties20. It shows that ambiguity exists in the principles of undue
influence.
18 Robert F. Presumed Undue Influence: The False Partition From Fiduciary Accountability. (2015) SSRN Electronic
Journal.
19 Carmelle P et al. The Wills Of Older People: Risk Factors For Undue Influence. (2008) International
Psychogeriatrics. 21(01) Page no. 7
20 James N, Stephen M and Dawn S. Measuring Channel Capacity To Distinguish Undue Influence. (2009) ACM
SIGPLAN Notices. 44(8)

COMMERCIAL LAW 9
Whether the rules of undue influence provide sufficient protection
Based on the above analysis, it can be seen that the principles of undue influence are not clear
and ambiguity exists during their implementation in a particular case. Due to the lack of rigid
policies and ambiguous regulations, the rules of undue influence did not provide sufficient
protection to the people who are at the risk of being taken advantage of. Many parties take
advantage of ambiguity in the principles of undue influence to gain an unfair advantage.
Following are different factors, which show how the rule of undue influence is not sufficient to
protect the people who are at the risk of being taken advantage of.
 Lack of set of rules to prove undue influence
The doctrine of undue influence is an equitable doctrine in which the court intervenes in a case to
determine which a person has exerted dominion over another party in order to gain or benefit
accruing to the defendant. The approach of ‘actual’ and ‘presumed’ undue influence was given in
the leading care of Johnson v Buttress. Both of these approaches have different elements that are
required to be fulfilled by the parties in order to claim for remedies. Actual undue influence
requires proof that the transaction in which the parties entered is the result of the actual influence
exerted. It may include a number of acts such as a threat to end a relationship or continuing
badgering a party until they give their content. In case of presumed undue influence, the
relationship between the matter of law and the transaction is analyzed by the court in order to
determine whether the principles of undue influence applies in the particular case21. These
definitions are ambiguous which made it difficult for the defendant to prove the principle of
undue influence. Due to lack of a rigid set of rules, it is relatively difficult for the court to
identify whether the principle of undue influence applies in a particular case.
21 Chenoy C. Contractual Free Will: Doctrines Of Economic Duress & Undue Influence (2015) SSRN Electronic
Journal.

COMMERCIAL LAW 10
 Lack of remedies available for the defendant
In case of presumed influence, the burden of proof lies on the defendant to disprove the undue
influence on the second party. In the case of Tulloch v Braybon (No 2)22, the court provided that
in order to disprove the undue influence, the defendant has to prove that the second party knew
and understood what he/she was doing and he/she was acting independently without the
influence of the dominant party. However, many times it becomes relatively difficult for the
defendant to prove his/her innocence due to lack of evidence or reliable proof. In the case of
Watkins v Combes23, the court provided that many times the plaintiffs are not genuine and they
file the suit of undue influence in order to gain an unfair advantage. In such case, it becomes
difficult for the dominant party to prove that he/she is innocence. Furthermore, this problem
arises in the case of professional relationship or love and affection as well.
 Psychiatric Conditions which affect capacity and vulnerability to undue influence
The law did not take into consideration the common psychiatric conditions of people, which can
result in affecting the capacity and vulnerability to undue influence. These conditions adversely
affect a person’s ability to understand relevant facts. They also affect people’s appreciation of
the consequences of specific actions, and it also affects their ability to interpret the situation-
specific factors. For example, dementias such as vascular cognitive impairment, Lewy body
dementia, and Alzheimer’s disease have specific characteristics regarding cognitive deficits.
However, in many cases, the level of cognitive impairment is relatively subtle or mid which
leads to a dispute between the parties24. The court did not take into consideration this factor due
22 (2010) NSWSC 650
23 (1922) HCA 3
24 Eric G M. Neuropsychological Assessment Of Testamentary Capacity And Undue Influence: Table 1. (2016)
Archives of Clinical Neuropsychology. 31(6), Pages 554-561

COMMERCIAL LAW 11
to which innocent people suffer. Furthermore, psychiatric conditions such as mood disorders,
delusions, alcohol, and other factors are not recognized by the court due to which the rules of
undue influence do not protect people.
Suggestions
As in the above-mentioned headings, the discussion has been made about the meaning, nature,
factors, remedies, and their efficiency related to Undue Influence, this section belongs to the
suggestions and recommendation in the concerned area. As mentioned earlier that although many
of the remedies are available with the victim party of the case in Contract Law and Probate Law,
yet the same is not sufficient in some of the cases, therefore what rules can be made further is
defined in the following discussion. Being the solicitor of the Charity, following are the
suggested ways to the Board of Management/ Directors of the charity in which rules related to
Undue Influence can be improved.
1. Development of Law- After the aforementioned study of the concerned topic, this is very
clear that Undue Influence is a major issue, especially in those cases where money is
involved. Neither in Contract Law nor in Probate Law, is a separate set of rule mentioned
there to prevent this issue. It has noted that in cases related to the issue, courts give a
decision according to the Judicial Precedents or based on natural justice. Development of
separate law is the highly required thing to do in this area. Until unless an explained and
dedicated law would not be there, prevention of such cases is not possible. Hence, this is
recommended that authorities must have developed either separate law or at least a set of
rule to protect the interest of the weaker party of the case.

COMMERCIAL LAW 12
2. Administrative courts and committee- In order to ensure the prevention of cases related
to Undue Influences, a committee must be there to entertain the request of the general
public and victim parties to the case. In many of the cases, it has noted that proper justice
has not granted in such cases due to their nature. As in these cases, the burden of proof
lies on one of the party i.e. on the defendant and for this reason proceedings and the
decision of the cases are delayed. It is recommended to establish a separate court to
entertain the cases of Undue Influence.
3. Whistle Blowing Policy- As mentioned in the earlier part that in some of the cases
innocent party does not get proper remedy cause of the higher position of the culprit. In
such cases, it becomes necessary to provide a platform where other people can make a
claim on behalf of the innocent party. It is very well known that Undue influence reported
in those cases where one party fails to stand on his/her decision and choices, hence it can
assume that the same will not be able to bring any action in against of another party of the
case. In such a situation it is necessary to develop a policy, plan or platform with that
help, a third party can raise his/her voice on behalf of the weaker party of the case.
4. Secret Compliant Forum: - As the name implies, these forums would be open for secret
complaints. It has noted that sometimes, making a complaint against the party who has
influence personality creates a danger for another party. Although this is general in law
that the victim party should bring an action to the court against the culprit to the case but
cases of Undue Influence are slightly sensitive in nature. In such cases, one party overrule
and influence decisions of others and for this reason, it can lead a threat to the innocent
party. Therefore, by providing a platform where without revealing the identity of the
victim, the same can make a complaint against the defaulting party.

COMMERCIAL LAW 13
In addition to the previously mentioned points, some more suggestions can also be made in order
to improve the available rules and remedies in the area of prevention of Undue Influence.
Definition and scope related to the subject must also be defined so that parties of the case as well
the authorities would not have any confusion about the applicability of rules. Further, necessary
steps should be taken to make the Proceedings of the case fast.
Conclusion
After the required study of the topic and review the related cases, in conclusion, this can be
stated that Undue Influence is a major issue of the society especially in the cases related to
Contract Law and Probate Law. This Briefing included the issues, rules and their sufficiency.
Further, this paper has enlightened the suggestion for improvement. This is to state here that
admitting the fact that there are remedies given under both of the mentioned law, improvement is
necessary. Certain groups of society are not aware of the granted remedies, and for this reason,
they fail to get the required remedies and damages. By the reason of unawareness of the parties,
two major issues generate. One is that the innocent party cannot get proper justice, another one is
defaulting party get some more courage to do this civil wrong with other parties. Rules on Undue
Influence are not clear as discussed in the previously mentioned point. Further, only preparation
and development of Law is not enough in this area, authorities need to ensure the applicability of
the same.
Mostly cases of Undue Influence only happen when a transaction takes place between the
relative parties; therefore, it is also the duties of the courts to check out the legal validity of the
transaction where parties to the case are relatives or close ones of each other. A court should be
more aware and focused on the contracts of family arrangements. Many of times, by reviewing
the mutual relation of parties, the existence of position of influence can be identified, hence in

COMMERCIAL LAW 14
such cases; the court must check the free consent of the other party. Undue Influence is a
significant issue and can cancel the whole object of the contract and will, therefore this is
required to develop some more laws in the area, and directors are requested to have a deep look
to the provided suggestion in the heading of “Recommendations” of this briefing paper.
Bibliography
Cases

COMMERCIAL LAW 15
Allcard v Skinner (1887) 36 Ch D 145
BCCI v Aboody (1990) 1 QB 923
CIBC Mortgages PLC v Pitt (1994) 1 AC 200
Johnson v Buttress (1936) HCA 41
Mutual Finance Ltd v John Wetton & Sons Ltd (1937) 2 KB 389
Tulloch v Braybon (No 2) (2010) NSWSC 650
Watkins v Combes (1922) HCA 3
Articles/Books/Journals
Anita B. Undue Influence (Penguin Books, 2016).
Carla S. Why The Testamentary Doctrine Of Undue Influence Should Be Abolished. (2010)
Kansas Law Review. 58(2), Page no. 245
Carmelle P et al. The Wills Of Older People: Risk Factors For Undue Influence. (2008)
International Psychogeriatrics. 21(01) Page no. 7
Chenoy C. Contractual Free Will: Doctrines Of Economic Duress & Undue Influence
(2015) SSRN Electronic Journal.
Emily L et al. Misconceptions About Coercion And Undue Influence: Reflections On The Views
Of IRB Members. (2012) Bioethics. 27(9), Pages 500-507
Eric G M. Neuropsychological Assessment Of Testamentary Capacity And Undue Influence:
Table 1. (2016) Archives of Clinical Neuropsychology. 31(6), Pages 554-561

COMMERCIAL LAW 16
James N, Stephen M and Dawn S. Measuring Channel Capacity To Distinguish Undue Influence.
(2009) ACM SIGPLAN Notices. 44(8)
Miler, C A. Elder Abuse and Nursing:What Nurses need to know and Can do (Springer
Publishing Company, 2016, Page no. 155)
Robert F. Presumed Undue Influence: The False Partition From Fiduciary Accountability.
(2015) SSRN Electronic Journal.
Sullivan J O and Hilliard J. The Law of Contract (Oxford University Press, 2016, Page no. 281)
Weisbord, R K, Horton, D and Urice S K. Wills, Trusts, and Estates: The Essentials.(Wolters
Kluwer Law & Business, 2018, Page no. 202)
Others
BusinessDictionary, Undue Influence (2018) <
http://www.businessdictionary.com/definition/undue-influence.html>
E-law resources, Undue Influence (2018) < http://e-lawresources.co.uk/Undue-Influence.php>
Law Explorer, Undue Influence (2016) < https://lawexplores.com/undue-influence/>
Nievod, A Undue Influence in Contract and Probate Law (2018) <
http://www.csj.org/pub_csj/csj_vol10_no1_93/undue_influence.htm>
Peck Law Group, What is considered the Basis of Undue Influence? (2013) <
https://www.premierlegal.org/what-is-considered-the-basis-of-undue-influence/>

COMMERCIAL LAW 17
The Law dictionary, what is Undue Influence (2018) < https://thelawdictionary.org/undue-
influence/>