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Credit Lyonnais Bank v Burch [1997]

Facts

  • A junior employee was asked to secure the company’s debts with her own house and take responsibility for any further debt
  • The bank quickly tried to enforce the security by repossessing the employee’s house

Issue

  • Could the transaction be set aside for undue influence

Decision

  • Yes

Reasoning

  • There was no relationship of trust and confidence, but such a significantly risky transaction should put the bank on notice
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