Duress, undue influence and unconscionability

Abstract

INTRODUCTION Summary of main points (1) Duress . This involves the application of illegitimate pressure so that the relevant contract or contractual modification is unsafe and should be set aside. The pressure will normally take the form of a threatened legal wrong (crime, tort, breach of contract, etc.). Exceptionally, it might be the threat of a lawful act (such as reporting a person to the police or some other authority). In the latter type of case, the court might regard the threat as ‘illegitimate’, that is, an unacceptable or morally reprehensible use of pressure; but this can only involve a value judgement because, ex hypothesi , the threat was not to break the law. (2) Undue influence . This is an equitable doctrine. ‘Actual undue influence’ is broader than coercion, although it can take the form of coercion. If actual undue influence is shown, there is no need to show that the transaction is objectively ‘unfair’ and ‘unbalanced’. However, the more common situation is that undue influence involves abuse of a relationship by someone occupying a superior or dominant position. Plainly, unequal relationships include solicitor/client, teacher/pupil, spiritual advisor/follower, trustee/beneficiary. Here, the law acknowledges that the danger of abuse exists. To this extent, the law speaks of ‘presumed undue influence’. In other situations, the claimant must show that, on the particular facts of the case, he ‘looked up to’ and so placed ‘trust and confidence’ in the other. […]