Undue Influence Meaning in Contract Law: Understanding the Basics
Undue influence is a term used in contract law to describe a situation where one party exerts pressure or influence on another party to enter into a contract against their will or better judgment. This influence can be through physical, emotional or psychological means, and the result is a contract that is invalid and unenforceable.
The principle of undue influence is based on the concept of consent, which is one of the essential elements of a valid contract. For a contract to be legally binding, all parties must freely and voluntarily agree to its terms without any coercion or duress. Therefore, if one party uses undue influence to get another party to sign a contract, then their agreement is not genuine, and the contract is not valid.
Undue influence is most common in situations where one party has greater bargaining power or influence than the other, such as in business transactions or family relationships. For example, if a person is in a position of trust or authority over another, such as a doctor, lawyer, or financial advisor, and they use their position to influence the other person to sign a contract, then it is a case of undue influence.
In contract law, there are two types of undue influence: actual or presumed. Actual undue influence is when a party demonstrates that they were subjected to improper pressure or coercion to enter into a contract. Presumed undue influence, on the other hand, is when the circumstances of the agreement imply that the weaker party was under undue influence.
Courts use a variety of criteria to determine the presence of undue influence, including whether the weaker party was vulnerable, whether there was a relationship of trust and confidence, whether the stronger party knew or ought to have known of the weaker party`s vulnerability or illness, and whether there was any sharp dealing or unconscionable conduct.
A contract that is found to be affected by undue influence will be declared voidable and unenforceable. The innocent party has the right to rescind the contract and seek restitution from the other party for any losses incurred as a result of the undue influence.
In conclusion, undue influence is a serious issue in contract law that seeks to protect vulnerable parties from being coerced into agreements against their better judgment. If you suspect that you have been subjected to undue influence in a contract, it is essential to seek legal advice to determine your legal rights and options. Remember, the law is on your side, and you have the right to protect yourself from any unfair or unethical practices.