Undue influence

Undue influenceThis equitable concept enables challenges in some circumstances to the validity of a contract or a will.  Ordinarily, the allegation will be that the person entering into a contract or the testator of a will did not exercise their own unfettered judgment when they created what would otherwise be a binding legal obligation. 

A frail elderly mother, frightened by one of her children makes a new will cutting out the inheritance of another child because of false accusations that have been made deliberately to poison her mind.  It is conduct that falls short of physical duress, but still means that the woman’s decision is not truly hers.

In some circumstances undue influence is presumed because of the relationship that exists between two parties.  The sort of relationships that give rise to an automatic presumption include parent and child, doctor and patient, trustee and beneficiary, solicitor and client.

Business people who have been required to give a personal guarantee to bankers to support the borrowings of their limited company, possibly backed up by a legal charge over the family home, may be familiar with the need for their spouse to be independently advised.

In the landmark legal cases of RBS Bank v Etridge, and before it Barclays Bank v O’Brien, the House of Lords (as it then was) and the Court of Appeal considered the circumstances in which banks have insisted on security from, typically, the wife of a businessman customer.  Unless careful procedures are followed, there may be a basis for a spouse in this position to challenge the claims of the bank if and when all goes wrong with the business and the guarantee is called upon.

In other cases, the possibility of undue influence may be inferred from the circumstances of a particular case or relationship. Someone who acts to their disadvantage in response to constant threats to end a relationship, for example, may be able to say that the obligation they appear to have created is actually unenforceable.

It is a complex area of the law with a number of different tests to be applied according to the people and the facts involved.  But it can be an effective means for someone to avoid a significant contractual liability or to overturn an unfair will that deprives them of an inheritance they might otherwise have received.

If you have been pressured into a commitment that has worked out to your disadvantage, or think that a relative or friend was “leaned on” before making or changing their will, contact us as soon as possible for advice. Email or telephone 01460 200450 for further information.