Undue influence

Undue influence, like misrepresentation and duress can make a contract voidable. So undue influence isn't a wrong which could lead to damages. Although it might be that the law will continue to develop in that direction, particularly as regards actual undue influence. But there is an important difference, I think, between undue influence and duress. Even though the two are sometimes alliedand they sometimes said that undue influence is an equitable counterpart to the common law doctrine of duress. And that's that there's no need to prove a threat, or illegitimate pressure for undue influence. So instead here we're looking for a relationship between typically the claimant and defendant where the claimant puts trust and confidence in the defendant, and the defendant then exerts their influence in a way which we can call undue. And typically, we talk about there being actual undue influence, or presumed under influence, but these are not two different claims, they're just two different ways of establishing a claim in undue influence. So, in actual undue influence the claimant proves, or  has to prove that there's a relationship of undue influence that existed at the time of their entering into the relevant transaction. Whereas in presumed undue influence the claimant proves primary facts, that then lead to a presumption of further facts that can ground the claim in undue influence. And that presumption can be rebutted. That presumption is rebuttable. So, for presumed undue influence, the claimant has to prove that they did put trust and confidence in the defendants, and that the contract, or the transaction in question calls for explanation. So, it's not just that, to use a typical example, a wife gave an ordinary sort of gift to her husband, but more that the wife gave such a huge gift, or did something so extraordinary that the ordinary fact of their relationship, or the ordinary course of their relationship, just isn't enough to explain that gift. And where the claimant can prove that, then that does raise a presumption of undue influence. And I think the best way of rebutting that presumption of undue influence is to show that the claimant received independent legal advice, understood it, and was deliberately and consciously making a well-informed decision in entering into the contract. Now, there is a question about causation in the context of undue influence, and whether you need to show that it was just, that the undue influence was just a reason for entering into the contract. As in duress or misrepresentation. Or rather, you need to show that the undue influence was a but for cause of the transaction being entered into. And that is something the case is not entirely clear on and you could think about further. And in particular, there were very difficult cases regarding undue influence in a three party scenario, and that will be the subject of the next video in this chapter.