Rebutting the presumption
When a fiduciary relationship is found to exist, undue influence is
presumed to have arisen. In order to rebut this presumption (or deny it), a
declaration (or a verbal denial) is not enough. There must be clear evidence
to show that there has been free exercise of independent will. Suggestions
were made in the following case as to how this could be accomplished.
The effect of a finding of undue influence
As the doctrine of undue influence in equitable in nature, the usual
principles of equity apply. The remedy where undue influence is found to
exist is therefore discretionary, so any contract formed is voidable, not
156 Contract law
Mother
SuperiorNunContract on joining the order of
nunsPosition of trust →Fiduciary relationship →Presumption of undue influenceFigure 10.3Re Brocklehurst (1978)
Lord Hailsham LC suggested that free exercise of ‘independent will’
can be shown by proving that:- Independent advice had been sought. This is a point much laboured
by the courts in the recent line of banking cases (see below), as if an
independent advisor is heeded this is likely to override the influence
of the other party. It is similar to the situation where a person is not
influenced by a misrepresentation where they have relied on their
own expert survey. - A full declaration had been made of the possible outcome of the
transaction. Provided that evidence of the declaration is available,
this is also powerful evidence of honest intention. - Consideration given was adequate. The general position is that
consideration need only be sufficient, so if a party goes out of the
way to ensure that it is adequate, for example, that it was good value
for money, then again this is evidence of good intention. - Any gift given was spontaneous. This is not likely to arise often, but
could do so where a person is given a valuable gift as an incentive.
Spontaneity may be evidence of honesty in such situations.