Undue influence in English law
Undue influence in English law is a field of contract law and property law whereby a transaction may be set aside if it was procured by the influence exerted by one person on another, such that the transaction cannot "fairly be treated the expression of [that person's] free will". Historically the doctrine had predominantly been invoked where the person who is exercising undue influence over another person either enters into a contract with the affected person or receives a gift from them. However, much of the recent case law relates to three party cases, where one person (often a husband) exerts undue influence on a second person (the wife) to enter into a transaction (providing a guarantee or security for the husband's debts) with a third party (often a bank). The doctrine originally developed because of perceived limitations in the law relating to duress. Although the modern law is different, previously in order to set aside a contract for duress it was necessary to show a threat of violence to the person (this is now no longer the case), and the doctrine developed in response to more subtle forms of coercion. Accordingly, many earlier cases which refer to undue influence are capable of being reconsidered as actually relating to duress or unconscionable bargains in the modern sense. The leading authority on undue influence is now the decision of the House of Lords in Royal Bank of Scotland v Etridge (No 2) However much of the earlier case law continues to be relevant. There has been no real statutory intervention in this area of the law. Despite the wide array of cases considering the doctrine, there remains some disagreement as to the precise ambit of the doctrine. Influence must be "undue" In order to challenge a transaction as having been entered under undue influence. It is not sufficient to show that the person was influenced by another person; there must also be a degree of impropriety about the exercise of that influence. Although there have been rare cases where a transaction has been set aside even where the party exercising influence is seeking to act in the best interests of the person being influenced, and that all that is required is that the person's free will has been vitiated, the preponderance of authority notes that undue influence has a "connotation of impropriety" or requires "unconscionable conduct". In Allcard v Skinner (1877) LR 36 Ch D 145 Lindley LJ said: However other cases have struck a very different tone. In Mummery LJ said: Chitty on Contracts suggests that the different approaches may be reconciled by taking into account the nature of the transaction. If the transaction is obviously one-sided such as outright gift (particularly to the person exercising influence), and especially if it will have a serious effect on the victim like leaving them with limited resources, where there is a relationship of trust and confidence between the parties, the courts will presume that the influence was undue. But this will not