void, which means that it may be set aside. The right to rescission may be
barred by:
- affirmation
- restitution impossible (although precise restitution may not be
necessary) - lapse of time
- third-party rights.
An example of the operation of the presumption of undue influence is
found in the following case.
The banking cases
The relationship between a banker and his client needs special mention. This
was not on the list of situations where a fiduciary relationship automatically
exists, and this is because the nature of the relationship between a particular
banker and client will vary. The normal transactions which take place every
day between a client and a banker, such as paying in or withdrawing money
and changing currency, would not give rise to a fiduciary relationship.
However, where particular transactions call for expert advice, for example an
interview with the bank manager to investigate the possibility of a loan to
finance a new business venture, a bank may go beyond its normal everyday
banking duties. In this case a fiduciary relationship could exist. Obviously
there is point at which this kind of relationship begins and this was identified
and explained in the following case.
Duress and undue influence 157Inche Noriah v Shaik Ali Bin Omar (1928)
Here a nephew formed an agreement with an older relative to hand over
property, and it was presumed that he had used undue influence. He
was unable to rebut the presumption.We could use our
house to secure the
loan ... my wife
won’t mind ...£10£