CHAR_A01.PDF, page 1-18 @ Normalize ( CHAR_A01.QXD )

• Compare economic duress with legitimate commercial pressure – Atlas
  Express v Kafco, Williams v Roffey; again, relate this to the question.

Question 3

• Introduce undue influence as unfair pressure on a party when forming a
  contract, which does not amount to common law duress, and explain that
  it is an equitable doctrine, developed to provide relief in cases of injustice.


• Explain that a finding of undue influence renders a contract voidable,
  therefore the bars to rescission apply: lapse of time, third-party rights,
  restitution impossible and affirmation.


• Explain that the banking cases are situations where there is not
  normally a special or fiduciary relationship, but there may be in
  particular circumstances, such as: where the client ‘crossed the line’
  into an area of confidentiality and undue influence is presumed –
  Lloyds Bank v Bundy; where the weaker party suffered manifest
  disadvantage – National WestminsterBank v Morgan; where there is a
  relationship of trust in the particular circumstances of the case – BCCI
  v Aboody, CIBC v Pitt.


• Explain how the presumption may be rebutted – Re Brocklehurst.


• Examine the state of the doctrine, firstly through Barclays v O’Brien
  which concerned a claim of undue influence. The court found that (a)
  there was a misrepresentation between husband and wife, and (b) the
  banks in these cases should be ‘put on enquiry’ (alerted, or informed).
  The whole loan was set aside. Secondly, consider cases which follow
  O’Brien, for example Banco Exterior v Mann, Midland Bank v Massey,
  TSB v Camfield, Royal Bank of Scotland v Etridge, Bank of Scotland v
  Bennett, especially regarding the extent of the duty to ensure that
  independent advice is given.

Question 4

This question combines the material from Questions 1 and 2, so you need

to watch timing very carefully.

• Use the introduction to Part 4 of the book to explain the idea of duress
  and undue influence as vitiating factors.


• Practice using the outline answers to the above two questions to explain
  more fully how duress and undue influence operate, so that you have as
  full an answer as time will allow, keeping a reasonable balance between
  the two doctrines.


• Show the link between the two doctrines in that they have both
  developed through recent case law to take account of the problems of a
  modern society and sophisticated economy.

Answers guide 309

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