Undue influence and equity: What happens if one party is stronger than the other?

by The FindLaw Team

In equity, when one party holds a stronger position when compared to another party, and compels the weaker party from making a free and independent decision, equitable intervention may be required in such a circumstance.
 

What is undue influence?

For the most part, undue influence may be more applicable to the impaired judgment of the weaker party as opposed to the conduct of the stronger party. As a consequence, influence can sometimes be considered as ‘undue’ even in the absence of pressure, concealment or coercive behaviour. The crux of the issue when looking at undue influence is to see whether the weaker party was prevented from making an independent and informed decision as a consequence of the influence of the stronger party. In some cases, even if the stronger party acts in a well meaning and innocent matter, may still be sometimes considered irrelevant when considering undue influence.

What are the categories of undue influence?

In equity, there are two main types of undue influence: presumed and actual (or express) undue influence. 

Presumed undue influence: there is a presumption in equity that certain relationships may give rise to undue influence and can include the following relationships:
 
  • trustee and beneficiary;
  • lawyer and client;
  • doctor and patient;
  • parent and child.

In relationships where a stronger party may benefit, a presumption of influence may be appropriate in relationships of dominion and dominance. Although on the other hand, the presumption of influence may also be dependent on the facts of each individual case.

When discussion is centred on undue influence, an assessment may be made in relation to the position of the weaker party relative to the stronger party. In such an instance, the evidential onus may be on the weaker party to demonstrate why they are in the weaker position and matters such as age, health, education, intelligence, business ability and personality may be some of the types of evidence used.

Actual undue influence: in circumstances where there is a lack of presumption of undue influence, the possibility that actual undue influence may be established if the person making the complaint can show that the transaction was not exercised with free will, therefore, showing that the influence was undue. 

 


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