Law of Contract: Undue Influence

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Questions and Answers

According to John Locke's theory of freedom as non-interference, which of the following scenarios would NOT be considered an undermining of one's freedom?

An external agency exerts force against your body, rendering alternative actions impossible.
An external agency coerces you against your will.
An external agency applies physical force that prevents other actions.
An external agency influences your decision-making process without applying physical force or coercion. (correct)

In the context of undue influence, what is the primary distinction between duress and undue influence?

Undue influence can be a form of coercive interference, with a broader scope than duress. (correct)
Duress is established by the courts of equity, while undue influence is developed by the old common law courts.
Duress focuses on coercive interference, while undue influence is a similar but narrower doctrine.
Duress is an equitable principle, while undue influence is a common law doctrine.

Quentin Skinner's Republican Conception of Freedom posits that an agent is free if they have the power to act and are not under the dominion of another agent. Which situation would be viewed as a violation of this freedom?

An individual is unable to act due to a physical disability.
An individual is influenced by societal norms and expectations.
An individual's actions are controlled or dominated by another agent. (correct)
An individual chooses not to act due to a lack of personal motivation.

Philip Pettit defends freedom as non-domination, arguing that freedom involves more than just the absence of interference. Which example would Pettit likely consider a limitation on an individual's freedom?

An individual adapts their preferences to align with external agencies to avoid interference. (B)

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In the context of 'Freedom as Non-Domination,' what distinguishes being 'at the mercy of another agent' from a situation of genuine freedom?

Being legally or morally dependent on another’s benevolence or permission. (B)

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Regarding the rule for undue influence, if 'B' exercises undue influence over 'A's decision to enter a contractual relationship, which remedies are available to 'A'?

Equitable remedies like rescission, potentially setting aside the contract. (A)

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Which of the following most accurately describes the approach courts take regarding the definition of undue influence?

Courts intentionally maintain a vague definition, allowing flexibility for various situations. (B)

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In Williams v Bayley (1866), what differentiated the situation from ordinary commercial pressure, leading the court to find actual undue influence?

The bank's explicit threat to prosecute the son for forgery unless the father mortgaged his property. (A)

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How did Daniel v Drew [2005] broaden the understanding of actual undue influence compared to duress?

By lowering the threshold of pressure needed to establish undue influence beyond explicit threats. (C)

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According to the content provided, to successfully claim actual undue influence, what must a plaintiff demonstrate?

The defendant exerted undue influence, leading to a disadvantageous clear for the plaintiff. (B)

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According to the content, what is the primary factor that leads to confusion between actual and presumed undue influence?

The tendency for parties to argue both simultaneously, blurring the distinctions. (D)

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When 'A' defers to or relies on the judgment of 'B', who possesses greater power or skill, what implications does this have for a contract that benefits 'B'?

It is presumed that a contract resulted from undue influence, and the contract is voidable. (D)

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What is the key difference between Class 2A and Class 2B presumed undue influence?

Class 2A involves a 'special relationship' recognized by courts, while Class 2B requires proving a relationship of trust and confidence. (A)

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Which of the following relationships is explicitly excluded from the class of 'special relationships' that give rise to presumed undue influence?

Spousal relationships. (D)

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In Allcard v Skinner (1887), what was the primary reason Allcard was ultimately barred from recovering her property, despite the finding of presumed undue influence?

She waited an unreasonable amount of time (six years) to bring the case. (B)

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According to Bowen LJ's observations on undue influence, what role does independent advice play in rebutting the presumption of undue influence?

It can serve as evidence to rebut the presumption if it is external and independent. (D)

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In Wright v Carter [1903], Vaughan-Williams LJ stated that a presumption of undue influence arises whenever there is a fiduciary relationship. Which of the following examples accurately reflects the scope of this statement?

It extends to all relationships where one party owes the other a duty of loyalty, such as director-company or trustee-beneficiary. (A)

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In cases of presumed undue influence (Class 2B), what must the claimant prove in addition to a relationship of trust and confidence?

The claimant must prove that there was something unusual or suspicious about the transaction. (B)

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Which of the following statements accurately reflects the outcome of Elton John v Richard James (1991)?

The court set aside the original agreement on the grounds of undue influence because James had exerted a 'dominating influence'. (B)

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What is the 'key question' that arose after Barclay's Bank v O'Brien regarding the duties of banks in cases of potential undue influence?

What exactly did the bank have to do to fulfill the duty ensuring free and fully informed consent. (D)

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According to Lord Nicholls in Royal Bank of Scotland v Etridge, what determines the weight or importance of independent legal advice in cases of potential undue influence?

It depends on all the circumstances; advice must be of sufficient quality. (A)

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In Ulster Bank v Fitzgerald, what was the decisive factor that led the court to rule the bank had fulfilled its duties in informing the wife, despite her not seeking legal advice?

The bank manager explained the nature of the guarantee to her and recommended that she seek legal advice. (A)

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In Ulster Bank v Roche, despite evidence of undue influence, what factor contributed to the court's potentially favorable view towards the bank?

The bank had no knowledge of the psychological abuse when the guarantee was made. (B)

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Horgan J.'s dissenting judgment in Ulster Bank (Ire) vs De Kretser emphasized which unfulfilled obligation of the Bank?

Taking proactive measures to safeguard the wife before she signed the guarantee for her husband's and his company's debts. (D)

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According to Sullivan M.R., as referenced in the content, what is the relationship between confidential relationships and unconscionable transactions?

It is a futile idea to believe that a confidential relationship must exist in order for someone to seek assistance in having an unconscionable transaction set aside in court. (C)

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What legal principle did Justice Kay emphasize in relation to transactions involving 'poor and ignorant' individuals, as seen in the content?

A court of equity will annul the transaction when a purchase is made from a poor and uneducated individual at a significantly undervalued price, and that person has no independent advice. (D)

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Megarry J. makes which proposal in the content?

He also proposed that the phrase poor and ignorant be updated to a less highly educated member of a lower income group to align with 'the euphemisms of the 20th century. (C)

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Lord Denning strives for which key idea?

Effective scene setting. Inequality of bargaining power, encompassing five distinct types cases. (D)

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From Denning's perspective which exclusion exists in most cases?

A customer who signs a bank guarantee or charge cannot escape it. (A)

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According to the content what does Marcus Moore ask?

Why does Lord Denning's balloon still intrigue. (C)

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What is A's right?

Has the right to disaffirm a contract. (A)

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Under Unconscionability, what does some people think it is/extension of?

See this as a natural extension of duress and undue influence; some people think it is a very distinct doctrine. (C)

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If a client has no ability to pay, what do the court's impose?

The court will impose the remedy. (C)

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Is the plaintiff or tort level of well-being higher?

Tort level of well-being higher. (A)

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Why did the judge award Farley the "distress and inconvenience" in Farley v Skinner?

Because of the aircraft noise. (A)

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What does, what does, J Parke emphasize?

J Parke: The common law rule is that when a party suffers a loss. (C)

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What did George Blake publish in 1989?

A autobiography. (B)

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Flashcards

Undue Influence

A legal principle where courts may invalidate agreements when one party unfairly exploits vulnerability.

Coercive Interference

Pressure that compels someone to act against their will, negating free consent.