Undue Influence In Contract Law

Introduction Undue influence is a vital concept under the contract law. It exists in situations where one party to a contract entered into an agreement with the other party due to the result of pressure exerted to him by that other party. The innocent party who has been subjected to the pressure may then seek an action to set aside the said contract. Undue influence can be said to be developed from the doctrine of duress under the English Common Law. Hence, it can be said that undue influence has certain similarities to the doctrine of duress under the English Common Law, such as rendering a contract to become voidable, except a few distinctive features. For instance, undue influence only exists in situations where there is unlawful pressure

The classification of undue influence was done in the case of Allcard v. Skinner where Cotton LJ divided undue influence into two classes while stated: “… First, where the Court has been satisfied that the gift was the result of influence expressly used by the done for the purpose; second, where the relations between the donor and done have at or shortly before the execution of the gift been such as to raise a presumption that the done had influence over the donor…the first clas of cases may be considered as depending on the principle that no one shall be allowed to retain any benefit arising from his own fraud or wrongful act. In the second class of cases the Court interferes, not on the ground that any wrongful act has in fact been committed by the done, but on the ground of public policy, and to prevent the relations which existed between the parties and the influence arising therefrom being

There are various relationships that are capable to give rise to a presumption of undue influence and there is no conclusive list of the relationships. Generally, the relationships that will give rise to a presumption of undue influence includes the relationship between parent and child, guardian and ward, solicitor and client, doctor and patient, trustee and beneficiary and even cases that involve religious influence. In a wider sense, undue influence will be presumed when the relationship between the donor and done is in a situation that the done is in a position to dominate over the donor due to the trust and confidence relied upon in the done. In the words of Chief Justice Latham in the case of Johnson v. Buttress, “…the presumption of undue influence arises whenever 'the relation between donor and donee is such that the latter is in a position to exercise dominion over the former by reason of the trust and confidence reposed in the