Previous: Privity of contract

A contract may be vitiated where someone in a dominant position makes use of such a position to attain benefits. This equitable concept is known as undue influence. It involves abuse or exploitation of those whose consent has been impaired.

Historic undue influence

In 1887, and the case of Allcard v Skinner [1887], the claimant joined a religious group, and subsequently transferred all of her assets to the group. Some time after leaving the group, the claimant attempted to regain ownership of the assets. It was said that as such a gift could not be reasonably accounted for, undue influence could be present. However, on the facts, such a lapse of time barred the claim.

More recently, National Westminster Bank v Morgan [1985] required that a manifest disadvantage must exist for a claim of undue influence claim to succeed. The case of Barclays Bank Plc v O’Brien [1994] attempted to define the concept clearly and set a detailed precedent. In Barclay’s Bank v O’Brien [1994], undue influence was divided into 2 categories: actual undue influence, where conduct of a stronger party must be shown, and presumed undue influence, where an influencing relationship could be presumed as a matter of law, or proved on the facts of the case. Finally, CIBC Mortgages v Pitt [1994] ruled that a manifest disadvantage requirement only applied in cases of presumed undue influence. However, a new precedent has now been set...

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