An Analysis of Duress and Undue Influence in Contract Law

This essay provides an in-depth analysis of duress and undue influence within the framework of contract law, specifically focusing on the Anglo-American legal system. It begins by defining undue influence and its role in protecting vulnerable parties, contrasting it with the narrower scope of duress. The essay explores the historical development of these concepts, highlighting how equity law evolved to address limitations in common law. It examines the impact of fraud, duress, and threats on contract validity, as well as the concept of "obvious fairness" in determining contract enforceability. The discussion covers the importance of free will and equal status in forming valid contracts and details how defects in intention can render a contract voidable. The essay compares the approaches of British and American contract law, including different classifications of undue influence, such as actual and presumed undue influence in the UK. It also explores the factors considered by US courts in identifying undue influence, such as the vulnerability of the affected party and the nature of the contract. Through case examples, the essay illustrates the practical application of these legal principles, providing a comprehensive overview of how duress and undue influence impact contractual agreements.

Duress and Undue Influence
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Introduction
Undue influence is a system unique to Anglo-American law that affects the effectiveness
of contracts. It aims to protect the weak in the transaction. It is the equitable law to compensate
for the lack of duress due to its narrow scope of application. On the basis of development, the
parties affected by improper influence may apply to the court to revoke the contract concluded
by the improper influence in order to protect their freedom of contract from being infringed.
Based on the analysis of the illegitimate influence system in the Anglo-American contract law,
this article compares the provisions of the civil law system on the flaws of meaning expression,
and considers that the illegitimate influence system has its unique function in both the Anglo-
American law system and the civil law system. The paper will demonstrate that if it can be
proved that one party has used fraud, duress or threats to cause the other party to conclude a
contract against its true meaning, the injured party has the right to request the court to change or
cancel the contract. In addition, if the compensation is unreasonable enough to constitute
"obvious fairness"-usually based on the conditions of signing similar conditions, the injured
party also has the right to request the court to change or cancel the contract.
Discussion and analysis
Contract represents a consistent product for both parties means that a valid contract must
be based on the equal status of the parties, free will, expressed their It was concluded by reaching
a consensus on a stand. Only in such cases can the parties be bound, which is a natural
requirement of the principle of contractual freedom1. If the parties have defects in their intentions
during the contracting process, it will affect the validity of the contract, making the contract to be
pending or can be declared invalid by the court (set aside by a court). The laws of different
1 Enonchong, Nelson. Duress, Undue Influence and Unconscionable Dealing (London: Sweet & Maxwell, 2012)

countries have different regulations on the situation of defect expression of meaning. In Anglo-
American contract law, undue influence is considered to be one of the reasons for contract
revocation (violable), which is a unique system in Anglo-American law countries.
The undue influence was developed by equitable law. "Its meaning is that the equity
court will exclude the benefits derived from undue influence.” The main reason for its
development lies in the common law of common law countries. The scope of the law's
formulation of traditional coercion is too narrow. Traditional coercion means that when two
parties express their intentions in the process of concluding a contract, one party rapes or
threatens violence with the other party, and forces the other party to make an expression of
intention contrary to their original intention. Coercion is very narrow in application. It is limited
to the use of violence to obtain remedies only when the contracting parties personally threaten or
threaten to impose violence, imprison or threaten to imprison the contracting parties. In order to
make up for the narrow scope of coercion, equity is gradually established in practice in the
process of concluding a contract. When one party has improper influence on the other party, the
contract concluded by the two parties may be cancelled. The improper influence in the broad
sense refers to all factual factors that illegally affect a party's independent judgment and
voluntary contract. It can be seen that the improper influence in the broad sense has a very broad
meaning, including various coercive situations. In the narrow sense of improper influence, the
parties are forced to conclude a contract based on improper indirect pressure and inducement.
This pressure and inducement usually takes the form of indirect mental, intellectual, or moral,
rather than direct violence. Generally speaking of undue influence refers only to the illicit
influence in a narrow sense, excluding the content of the coercive rules. However, not all
influences are considered improper, and the key lies in whether one party to the contract is

completely in control of the other's advantage. "As long as it is based on the principle of fairness,
such influence has restricted one party's ability to judge and voluntarily contract, so that the party
loses its equal bargaining position in the process of signing the contract, which constitutes an
improper influence. The impact is not intentional. In the American contract law, the improper
influence is called threat is improper. Although the term is different, its meaning and legal
remedy are generally the same. However, the specific provisions of the British Contract Law and
the American Contract Law on undue influence are not the same, mainly manifested in different
classifications of undue influence.
In BBCI v. Aboody2, Slade LJ divided undue influence into actual undue influence and
presumption of undue influence. In 1993, the House of Lords in Barclays Bank plc v. O. A
comprehensive re-examination of the entire doctrine of undue influence in the case of 'Brein
(1993), in which Lord Browne-Wilkinson affirmed the aforementioned court's undue influence
in Barclays Bank plc v. O'Brein3 The analysis done and Slade LJ's classification of undue
influence. At present, the classification method generally accepted by the British judicial and
theoretical circles is to classify the improper influences into two categories according to the
identity of the party exerting the improper influences and the litigation certification process.
According to the principle of equity, if there is no special fiduciary relationship between
the parties, the disadvantaged contract parties effectively prove that their contract is based on the
belief of the other party and the inducement and pressure of the other party, which is practical.
Improper influence exists and the contract can be set aside. Different from the presumption of
improper influence, the actual improper influence is not established based on the presumption of
the law. It is established based on the litigation proof of the parties. The disadvantaged contract
2 [1992] 4 All ER 955
3[1993] UKHL 6

parties must bear the burden of proof to cancel the contract. For example, in the English court
case in Williams v. Bayley4: A claimed to B that unless the coal mine operated by B was
mortgaged to A, A would expose the lifetime exile of the son of B who forged his father's
signature on the promissory note and demanded payment. For the crime, B was forced by A to
sign a coal mine mortgage contract with A. In this regard, the court held that A had exerted
undue influence in an attempt to obtain ill-gotten gains, and thus cancelled the contract between
the two parties.
That is, when the parties have a certain trust relationship, the law presumes that the
contract they have entered into has an undue influence. The parties are in a trust relationship due
to long-term close exchanges. If there is any agreement on disposition of money or property, the
law concludes that there is an undue influence in the contract concluded between the parties.
Therefore, the beneficiary party who has the advantage only has to submit effective reproofing
(providing the presumption) to prove that there is no undue influence. The contracting party is
deemed to be valid, otherwise the other party may apply to cancel the contract. The British
House of Lords has divided this presumed undue influence into two types: the first is that the
presumptive undue influence must be legally necessary, that is, as long as the parties have one of
the following relationships, the law does not hesitate to presume Contracts have undue influence.
These relationships include: the relationship between the mentor and the mentee, the relationship
between the doctor and the patient, the relationship between the nephew and the elderly aunt, the
relationship between the son and the parent, the relationship between the parent and the minor,
Relationships between trustees and beneficiaries of trusts, lawyers and clients, and teachers and
students. For a contract established between the parties that has the above-mentioned
relationship, the law presumes that the contract was established by improper influence. This type
4 (1893) 1 Ch. 736, 756.

of contract is valid only if the dominant party raises counter-evidence to prove that it has not
exerted undue influence on the other party, and that the other party was concluded solely by
independent will. Otherwise, the party affected by improper influence will be allowed to cancel
the contract. The British court held that the most effective proof of contradiction was to point out
that the other party had been faithfully advised by a third party before concluding the contract, so
that all suspicions were completely eliminated. The second type is semi-presumptive improper
influence, that is, although there is some kind of trust relationship between the parties to the
contract, such as the relationship between the client and the agent, it is not immediately
presumed to have an improper influence, only in the affected party5. Evidence proves that he has
always trusted, and the law only presumes that it has an undue influence on the other party. Of
course, the other party can also contradict this presumption. The law must have a presumptive
improper influence, and the relationship between the parties is relatively close. The affected
party only needs to point out that the relationship exists to presume; the semi-presumptive
improper influence is relatively alienated, The affected party must assume that it has always
trusted the other party before it can be presumed. The common ground between the two is that
the defendant must / may file a contradiction to reverse the presumption.
It can be seen from the above that in the United Kingdom, due to the different types of
improper influence, the identification or certification methods are different, that is, subjective
presumption is adopted for cases with special relations, and objective proof is adopted for cases
without special relations.
United States does not directly divide the types of undue influence, but divides cases of
undue influence into two categories in judicial practice. The first type is the use of the unjust
5 Poole, Jill. Casebook on Contract Law. (2016).

influence of dominance, that is, one party uses the psychologically dominant position in an unfair
and reasonable way to induce the consent of the subordinate position to establish a contract; the
second type is the use of the believer The improper influence of the status of a party, that is, one
party uses the status of his trusted person rather than the dominant position to persuade the other
party to agree to form a contract. The distinction between the two types of cases is sometimes not
very clear, because a dominant person often takes advantage of the status of the person he has
trusted6. Regardless of the type of case, US courts do not treat improper influences as the British
courts do, but instead use objective evidence to identify them. In order to withdraw the contract,
the disadvantaged party must provide evidence that he was improperly affected (that is, the party
claiming to be affected), and then the court will comprehensively consider the following factors
to determine: (1) Affected person Whether your mental, psychological, and physical condition is
susceptible to influence by others. Such as mental and physical weakness and psychological
dependence are susceptible factors; (2) whether there is an opportunity to exert influence. Such
factors as dominance or the existence of a trust relationship are factors of possibility; (3)
Whether there is any fact that an improper influence has been exerted. If the conclusion of the
contract was initiated by the party improperly affected or the affected party did not obey the
reasonable conditions of the third party's advice, these are factual factors; (4) whether the content
of the contract is unusual. If the consideration is too unequal or the reason is insufficient, and
there is undue negligence, these are factors of injustice. (5) The negotiation of the parties'
transactions is abnormal or the time is inappropriate; (6) The place where the parties conclude
the agreement is inappropriate.
In the case of inconsistency between the meaning and the expression, in order to protect
the interests of the good faith counterparty, the contract is not invalidated unless the counterparty
6 Adamson, John E. Law for Business and Personal Use. (Mason, OH: South-Western Cengage Learning, 2009).

knows that it has reservations. In cases where the expression of interest is not free, the legislation
of various countries stipulates that the contract may be cancelled. China traditionally belongs to
the civil law system, and basically inherits the civil law system from the civil law system in the
system of defect expression of meaning, but they are not completely the same, but they cannot
cover undue influence, as follows:
1. Fraud and undue influence
Fraud refers to the act of intentionally stating false facts or concealing the truth for the
purpose of putting others in error and thus expressing their intentions. In order to constitute
fraud, the following requirements must be possessed: first, the fraudster must be fraudulent;
second, the fraudster must be deliberately fraudulent; third, the fraudulent person is caught in a
wrong judgment due to fraud; fourth, the fraudulent person is wrong because the person
performing the fraud can be a counterparty or a third person, but when the person performing the
fraud is a third person, the counterparty must know that the person has been fraudulently, or that
the person who knows the fraud is available7. Cancel the contract. Improper influence does not
subject one party to malicious intention intentionally, nor does it objectively require one party to
act inconsistently with the facts, let alone state false facts and intentionally conceal the true
situation. And improper influence can only come from the counterparty of the contract. Fraud is
a very direct and intentional influence on the other party's intention to express a flawed intention.
The undue influence is usually implemented in the form of indirect mental, intellectual or moral,
which affects a party's autonomy of intention and causes defects in the expression of intention.
2. Coercion and undue influence
7 [1985] AC 686

Coercion is the act of imposing hazards on the other party, causing them to fear, and
expressing a certain meaning based on such fears, including various forms of coercion, coercion,
and violence by one party against the property, person, etc. of the other party Coercion. The
constituent elements of coercion include: first, the intention of coercion; second, there must be
coercive behavior; third, coercion is illegal; fourth, coercion must be feared by coercion; fifth,
coercion Intimidate people into meaning based on fear. Improper influence does not require one
party to impose physical threats or threats on the other party, and the affected persons need not
be afraid as in Bainbrigge v. Browne 8. Coercion is often a more explicit expression that makes
one party feel the danger or the urgency of the damage, causing it to fear, and thus submitting to
coercion as a defect. The improper influence is more moderate or obscure, with a kind of
penetration Force affects the will of the parties. In the case of presumed improper influence when
there is a special relationship, it is more different from coercion. "Improper influence is lighter
than coercion in terms of the seriousness of the problem."
3. Risk of impropriety and danger of improper influence
This means that the perpetrator is using the embarrassing situation of another person or
urgently needs to force the other party to accept some obvious wrong Fair conditions, and make
expressions contrary to true meaning. From this, it can be seen that the danger of one person
emphasizes that one party is in distress or urgent needs, and the other party takes the opportunity
to propose a harsh condition. One party is forced to accept the harsh condition and make an
untrue expression of intention. Suffered significant losses. The occurrence of undue influence is
not conditional on a party being in a precarious situation or urgent need, nor does the occurrence
of undue influence emphasize that the party has suffered significant losses because of his
8 (1881) 18 Ch. D. 188

intention. Obviously, the danger of taking advantage of people is more serious than the improper
influence in the degree of affecting the parties' voluntary expression.
4.Major misunderstandings and undue influence
The so-called major misunderstanding is that "the actor misunderstood the nature of the act, the
other party, the variety, quality, specifications, and quantity of the object, causing the
consequences of the act to contradict his meaning and causing greater losses as revealed in Royal
Bank of Scotland Plc v Etridge 9." Case. This misunderstanding "should be interpreted not only
to mean that the meaningless person's faultless representation does not match (wrong), but also
the opposite person's understanding of the meaning of the meaning (misunderstanding)." The
major misunderstanding focuses on the inconsistency of meaning and expression That is, the
meaning expressed by the perpetrator is not consistent with its true meaning, and requires a
greater loss to the perpetrator in the result. The undue influence is based on the expression of
meaning that the perpetrator cannot be truly free.
Strictly speaking, showing fairness is not a flaw in the expression of meaning. It focuses
on the imbalance of the distribution of benefits between the parties to the contract, that is,
protecting the fairness of the transaction results, which is physical justice. The undue influence
on the flaws of the parties' intention is to ensure the realization of the freedom of contract from
the procedure of contracting.
Conclusion
The paper has demonstrated that if it can be proved that one party has used fraud, duress
or threats to cause the other party to conclude a contract against its true meaning, the injured
9 R (No. 2) [2002] UKHL 44

party has the right to request the court to change or cancel the contract. In addition, if the
compensation is unreasonable enough to constitute "obvious fairness"-usually based on the
conditions of signing similar conditions, the injured party also has the right to request the court
to change or cancel the contract. This means that duress and undue influence together constitute
an appropriate law against unconscionable contracts.

References
Williams v. Bayley (1893) 1 Ch. 736, 756.
Bainbrigge v. Browne (1881) 18 Ch. D. 188
Barclays Bank plc v O’Brien [1993] UKHL 6
Bank of Credit and Commerce International SA v Aboody [1992] 4 All ER 955
Royal Bank of Scotland Plc v Etridge (No. 2) [2002] UKHL 44
National Westminster Bank Plc v Morgan [1985] AC 686
Enonchong, Nelson. Duress, Undue Influence and Unconscionable Dealing (London: Sweet &
Maxwell, 2012)
Poole, Jill. Casebook on Contract Law. (2016).
Adamson, John E. Law for Business and Personal Use. (Mason, OH: South-Western Cengage
Learning, 2009).
Davies, Paul S., and J. C. Smith. JC Smith's the Law of Contract. (2018).