In: Finance
What is Undue Influence? Name the five elements exactly. Provide an example of when this would be used.
Undue influence occurs when the more influential party takes
advantage of the weaker party to the detriment of the weaker party.
Hence they influence the weaker party to take decisions which they
would have normally not taken. The parties must have some sort of
relationship between them.
5 elements are:
1. Relationship between the parties.
2. The weaker party must lack free will because of the influence of
the stronger party
3. A contract or gift must occur between them.
4. Position to dominate the other (Fiduciary relationship, Real or
apparent authority and person whose mental health is not good..
Fiduciary means trust, Real authority might be father between(
father son relationship )
5. Obtain unfair advantage.
Example: The sons and daughters taking advantage of a sick mother
and influencing her in that state to sell her property in order to
pay her medical bills. Here since the mother is dependent and under
duress hence that can be a case of undue influence where by
persuasion or coercion the mother’s decision was influenced by her
children
Best of Luck. God Bless