Undue Influence Flashcards
(7 cards)
What is the leading case on undue influence?
(a) Barclays Bank PLC v O’Brien
(b) Barton v Armstrong
(c) Royal Bank of Scotland PLC v Etridge (No. 2)
(d) Allcard v Skinner
(c) Royal Bank of Scotland PLC v Etridge (No. 2)
The House of Lords heard 8 conjoined appeals and it took the opportunity to lay down guidelines on the law on undue influence
Which of the following is unlikely to be a relationship of influence or ascendancy?
(a) A relationship of sufficiency
(b) A relationship of trust and confidence
(c) A relationship where one party is vulnerable
(d) A relationship of dependence
(a) A relationship of sufficiency
A relationship of sufficiency is unlikely to be one of influence or ascendancy. However, relationships of trust and confidence, or dependence or vulnerability are likely to be relationships of influence or ascendancy
In which of these relationships does the law presume irrebuttably that one person had influence over the other?
(a) Guardian and ward
(b) Husband and wife
(c) A business and its customers
(d) Employer and employee
(a) Guardian and ward
The law presumes irrebuttably that in a relationship between a guardian and his ward, one party had influence over the other. This is irrespective of the true facts. However, the presumption that the transaction was procured by that influence may be rebutted
Why is the case Barclays Bank plc v O’Brien significant in regard to the doctrine of undue influence?
(a) It provided guidance for lenders concerning how they might avoid being fixed with notice of a contracting party’s undue influence
(b) It provided guidance as to what bank managers should do if their employees did not follow instructions
(c) It clarified the law regarding the legal and evidential burden when proving undue influence
(d) It clarified the law regarding the effect of undue influence
(a) It provided guidance for lenders concerning how they might avoid being fixed with notice of a contracting party’s undue influence
The House of Lords in RBS v Etridge (No. 2) continued this theme and provided further guidance as to the steps a lender ought to take to satisfy itself that the charge was the product of the spouse’s free will
When will a bank be put on inquiry that a surety transaction might be tainted by undue influence?
(a) If the transaction is for a large sum of money
(b) When the bank meets with the spouse and explains the nature of the loan agreement to that spouse
(c) When the debtors default on the loan agreement
(d) Whenever one party in a non-commercial setting is standing as surety for the other party
(d) Whenever one party in a non-commercial setting is standing as surety for the other party
What step should a bank take to satisfy itself that that a surety transaction is not affected by undue influence?
(a) The bank should ensure that the spouse has read all the documents pertaining to the transaction
(b) The bank should see the spouse itself and discuss the surety transaction with them
(c) If the bank is aware that the spouse may have been misled, the bank should tell the solicitor of this
(d) The bank should provide the solicitor advising the spouse with the bare minimum information about the transaction
(c) If the bank is aware that the spouse may have been misled, the bank should tell the solicitor of this
This will enable the solicitor to advise the spouse appropriately regarding the transaction
What remedy will a spouse have if they are unhappy with the standard of service provided by a solicitor regarding a surety transaction?
(a) The spouse can sue the bank for the solicitor’s negligence
(b) The spouse can bring a claim for the surety transaction to be set aside
(c) The bank can sue the solicitor in negligence
(d) The spouse can sue the solicitor in negligence
(d) The spouse can sue the solicitor in negligence
The solicitor has a duty to the spouse, and they can be sued in negligence if they breach that duty
