End-of-chapter questions: Answer Guidance 18.1

Undue influence

For this question you should first establish that Josh is acting as a result of Donna’s undue influence. But the key to this answer is deciding whether or not Quickbuck Bank had notice of the undue influence such that it cannot enforce Josh’s guarantee. You must discuss cases such as Royal Bank of Scotland v Etridge here. In particular, it would be helpful to consider whether the bank has done enough to satisfy itself that there is no undue influence here. In accordance with what was said in Etridge, the bank has ensured that Josh takes independent legal advice, but the solicitor has also told the bank that Josh would simply do anything Donna told him to do. As a result, it is clearly arguable that the bank did still have notice of the undue influence and should not, perhaps, be able to enforce the guarantee. You might express your own views as to whether the law in this area is satisfactory.