Undue influence is a doctrine which evolved from common law. It is used to explain an unequal contract relationship in which one party, who is dominant over the other for any number of reasons, uses their influence to persuade the other party to agree to a situation that is not beneficial to them. The dominant party might have more education, or money, or might be taking advantage of a close emotional relationship with the other party in order to get something they want.
This legal concept is used most commonly in the context of a contract between two parties. When one party uses their advantage over another party to get them to sign a contract that does not benefit them, it may be considered undue influence.
Once the wronged party has concluded that they have been duped, they may take the matter to court and claim undue influence. This can be done in an attempt to have restored to them whatever was taken away by signing the contract. Courts often grant undue influence as a remedy, because the wrong party has reason to trust the party who tricked them, and legal justice has an interest in seeing the wronged party made whole.
There are many example that could be given of the types of relationships where undue influence could be exerted. It may be because there is an emotional or legal relationship which makes one party susceptible to the other’s influence.
Some special relationships creating trust and confidence include:
- Spousal relationships;
- Attorney-Client relationships; and
- Doctor-Patient relationships (Including Psychiatrist-Patient).
There can also be undue influence in the absence of one of these recognized types of relationships. It may also be simply that one party is more educated and knowledgeable than the other, and takes advantage of that fact in order to get the other party to agree to a contract.
If a court chooses to exercise the remedy of undue influence, it can free the duped party to the contract from having to meet the terms of the contract. This is also known as making the contract “voidable,” which means that the victim in the situation can choose to have the contract rendered void.
Undue influence requires a certain level of persuasion. Simply giving advice does not make one party to a contract guilty of undue influence. What will amount to undue influence is something more along the lines of harassment, in which a dominant party badgers and pleads with the other party. Or, the innocent party may know that they their relationship with the other party will be threatened if they do not acquiesce to their demands.
Essentially, any situation where the innocent party feels they have no choice but to agree to a contract that will harm them, because of the dominant party’s influence, can be construed as undue influence by a court of law.
There are four elements which must be proven in order to prove the overall concept of undue influence. They are:
- The victim must show reasons why they were susceptible to someone else’s influence. Maybe the other party is their spouse, or maybe the victim was recently traumatized;
- The victim must explain how the other party had the opportunity to take advantage of them;
- The victim must then show that the other party did, in fact, take advantage of that opportunity, likely by bullying them; and
- There must be evidence of the contract or agreement which the dominant party bullied the innocent party into, and which harmed the innocent party.
First, the accused can show that the victim received advice from another party outside the situation. If that third party can testify that they did counsel the victim, it may prove that the victim actually knew what was going on, and was not unduly influenced.
Second, if the court can determine that the questionable transaction or harmful contract was actually fair to both the victim and the dominant party, then a claim of undue influence cannot be proven. Even if the relationship between the victim and defendant is an isolated one, undue influence cannot be found if the defendant is not taking advantage of the situation to benefit him or herself.
If you believe you have been persuaded to become party to a contract or agreement, and believe that you have been the victim of undue influence, you should consider consulting with a business lawyer.
The lawyer will be able to review the contract, as well as any statements you make regarding the transaction, and will be able to determine if you do seem to be the victim of undue influence. Assuming that is the case, the lawyer can then guide you through the legal process of seeking a remedy for the wrong, and can represent you in court, if necessary.