Undue Influence

Front 1

Actual undue influence: court knows what happened;

Williams v Bayley; threat to go to police about forged signatures in return for mortgage was not binding;

BCCI v Aboody; shouting a wife unintentionally unduly influenced her so contract was void;

CIBC Mortgages v Pitt; undue influence should seen as similar to fraud and proof of improper pressure make the contract void ;

Nottidge v Prince; threat of magic was enough to unduly influence

Back 1

Presumed undue influence; make an onlooker suspicious;

Requires two ingredients;

1: a relationship either recognised (parent & child, religious advisor & disciple, lawyer & client, doctor & patient, trustee & beneficiary) or developed so everyone else;

2: a deal that requires explanation

Front 2

Alcard v Skinner; refusing someone legal advise is unduly influencing them, although she wasn't entitled to the money due to lapse of time;

Goldsworthy v Bricknell; elderly farmer sold his farm to neighbour for suspiciously low price yet no undue influence was used;

Back 2

Lloyds Bank v Bundy; held unenforceable as father only received advise from banks lawyer who had a conflict of interest;

Macklin v Dowsett; surrendering life tenancy required explanation because it was so obviously a bad deal

Front 3

Constructive notice: undue influence concerning jointly owned property's

Back 3

Barclays Bank v O'Brien; bank unable to repossess house due to misrepresentation made by the husband to the wife;

CIBC Mortgages v Pitt; house was able to be repossessed because couple signed papers even though husband lied to the bank for the purpose of the money

Front 4

Royal Bank of Scotland V Etridge; leading case for constructive notice as wife was unduly influenced by husband and so house was unable to be repossessed;

Back 4

Set out criteria for future cases;

1: needs to be a jointly owned property;

2: relationship were one side is likely to dominate;

3: couple need to receive detailed independent advise (if not will be voidable);

4: advice must include: nature of the agreement, potential risks, and whether the other partner is able to pay the repayments (if not then voidable)

5: if yes to all then the bank can recover the house

Front 5

If the answer to 1&2 is no then constructive notice doesn't apply

Back 5

Answer no to part 2;

Chater v Mortgage Agency Services; bank were unable to repossess due to being unaware of mother/son relationship;

Hewett v First Plus Financial group; house was unable to be repossessed because information about the husbands affair was unknown;

Banco Exterior V Thomas; house was repossessed even though elderly lady was given the advice not to enter the contract