Principles of Business Law Past Paper 2024 PDF
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2024
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Summary
This document provides a presentation on the topic of undue influence in business law for Semester 2 of 2024. It covers the concept of undue influence, types of undue influence (actual and presumed), and provides examples illustrating presumed undue influence in cases like Allcard v Skinner and Johnson v Buttress. The summary specifically highlights the factors contributing to a presumption of undue influence, like relationships with special trust and confidence, and situations with traditional roles like parent-child or doctor-patient.
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Principles of Business Law Semester 2 2024 TOPIC 8: VITIATING FACTORS UNDUE INFLUENCE Undue influence: Overview Undue influence may exist when, because of their relationship, one party necessarily places trust and confidence in the other. The dominant party may be able to influen...
Principles of Business Law Semester 2 2024 TOPIC 8: VITIATING FACTORS UNDUE INFLUENCE Undue influence: Overview Undue influence may exist when, because of their relationship, one party necessarily places trust and confidence in the other. The dominant party may be able to influence the decisions of the weaker party. Undue influence may permit the weaker party to avoid the contract. The victim of undue influence must act reasonably soon to have the contract set aside, once the influence has subsided, or they will be treated as having affirmed the contract (recall video 8.1). Types of undue influence If relying on actual undue influence, the ‘weaker’ party Actual undue influence – requires must prove that that the proof that the transaction was the transaction was the outcome of result of undue influence. actual influence exercised over the mind of the weaker party. Presumed undue influence – Where under influence is presumed, because of the difficulty in proving then the onus of proof shifts. The actual undue influence, the courts will ‘stronger’ party must prove that the make presumptions of undue influence weaker party was freed of the in certain circumstances. deemed undue influence. Undue influence Presumed undue influence The courts will presume that entry into a contract was the result of undue influence where: 1. parties are in a relationship that comes within the traditional categories of presumed influence (that is, where there is a presumption of a general controlling interest); parent/child; guardian/ward; solicitor/client; doctor/patient; see also Allcard v Skinner. 2. where the relationship falls outside those categories, but the nature of the relationship is such that one party (the weaker party) can be shown to have reposed special trust and confidence in the other (the stronger party) (that is, where a general controlling influence is proven). see Johnson v Buttress Presumed undue influence: Presumption of general controlling influence Allcard v Skinner FPBCL p 303-4 Facts A joined a religious order and took a vow of poverty. A donated her property to the religious order. When A left the order, she sought to recover the money she had donated. She claimed she was entitled to recover the money as it had been paid as a result of undue influence. Issue Could the gift transaction be avoided on the basis of undue influence? Presumption of general controlling influence: Allcard v Skinner (ctd) Decision The transaction could not be avoided on the basis of undue influence. Reason Undue influence? The relationship of devotee/religious advisor gave rise to a presumption of undue influence (a presumption of general controlling influence). S was unable to rebut the presumption. A therefore had, at one point in time. a right to avoid the transaction. Affirmation? A lost her right to set the transaction aside because she took too long to exercise the right. A should have exercised the right as soon as the undue influence lapsed (that is, very soon after leaving the religious order). Presumed undue influence: Proof of general controlling influence Johnson v Buttress FPBCL p 372-3 Facts B was an elderly, excitable, and emotional man who was unable to read or write and very dependent on others for help. B gave his land and cottage to J three years before he died because she had been good to his wife and because she took care of him. B lived with J for about three weeks and then went to live on land he had given to J (at first in a tent and later in a shack he built). The transfer of land was challenged on the basis of undue influence. Issue Could the transfer be set aside on the grounds of undue influence? Decision Proof of The gift could be set aside on the basis of undue influence. general controlling Reason B and J were not in a relationship traditionally understood influence: to involve a controlling influence. However, B placed a high degree of trust and confidence in J. Johnson v Because of this trust and confidence, it was presumed that the transaction resulted from undue influence. Buttress J was unable to rebut the presumption – that is, she was unable to show that the transfer was an exercise of B’s (ctd) freewill. B had not acted to affirm the transfer.
