CHANAKYA NATIONAL LAW UNIVERSITY,

NYAYA NAGAR, MITHAPUR, PATNA – 800001.

TOPIC - “PRESUMPTION OF UNDUE INFLUENCE”

FINAL DRAFT SUBMITTED IN THE PARTIAL FULFILMENT OF THE COURSE

TITLED –

CONTRACT-I

SUBMITTED TO:

Mrs. SUSHMITA SINGH

FACULTY OF LAW OF TORTS

SUBMITTED BY : ADARSH KUMAR

ROLL NO : 1907.

SEMESTER : SECOND.

SESSION : 2018-2023.

COURSE : B.A. LL.B. (Hons.)

DECLARATION

I hereby declare that the project entitled “Presumption of undue influence” submitted by me at
CHANAKYA NATIONAL LAW UNIVERSITY is a record of bona fide project work carried
out by me under the guidance of our mentor Mrs. Sushmita Singh. I further declare that the
work reported in this project has not been submitted and will not be submitted, either in part or
in full, for the award of any other degree or diploma in this university or in any other university.

__________________

(ADARSH KUMAR)

Roll no. - 1907

 ACKNOWLEDGEMENT

It is a fact that any research work prepared, compiled or formulated in isolation is inexplicable
to an extent. This research work, although prepared by me, is a culmination of efforts of a lot
of people who remained in veil, who gave their intense support and helped me in the completion
of this project.

Firstly, I am very grateful to my subject teacher Mrs. Sushmita Singh, without the kind support
and help of whom the completion of this project was a herculean task for me. She donated her
valuable time from her busy schedule to help me to complete this project. I would like to thank
her for her valuable suggestions towards the making of this project.

I am highly indebted to my parents and friends for their kind co-operation and encouragement
which helped me in completion of this project. I am also thankful to the library staff of my
college which assisted me in acquiring the sources necessary for the compilation of my project.

Last but not the least, I would like to thank the Almighty who kept me mentally strong and in
good health to concentrate on my project and to complete it in time.

I thank all of them!

_______________

ADARSH KUMAR

Roll no. – 1907

B.A.LL.B.(Hons.)
 TABLE OF CONTENTS

1. INTRODUCTION
 AIM AND OBECTIVE
 HYPOTHESIS
 RESEARCH QUESTIONS
 RESEARCH METHODOLOGY
 SOURCES OF DATA
 LIMITATIONS OF THE STUDY

2. UNDUE INFLUENCE
3. PRESUMPTION OF UNDUE INFLUENCE
4. ROLE OF JUDICIARY
5. BURDEN OF PROOF
6. CONCLUSION
7. BIBLIOGRAPHY
 INTRODUCTION

In jurisprudence, undue influence is an equitable doctrine that involves one person

taking advantage of a position of power over another person. This inequity in power
between the parties can vitiate one party's consent as they are unable to freely exercise
their independent will. 1
Where it is established that a plaintiff was induced to enter into a contract or
transaction by the undue influence of the defendant, the contract may be rendered
voidable. If undue influence is proved in a contract, the innocent party is entitled to set
aside the contract against the defendant, and the remedy is rescission.
As the law of undue influence was applied and developed by the court of Chancery,
it developed into two distinct classes:” actual” undue influence and “presumed” undue
influence.

In Australia, the leading case on undue influence is Johnson v Buttress(1936) in which the
approach to 'actual' and 'presumed' undue influence was at issue.

 Actual undue influence2, where it is proven that the defendant exerted influence over the
complainant to have them enter into a contract.
 Presumed undue influence, made up of:

1. deemed relationship of influence, relationships that raise the premise, as a matter of

law, that influence has been utilised;
2. relationship of influence in fact, where the complainant ensconces that trust and
confidence was bestowed in the wrongdoer and therefore a presumption of influence
should be recognised.

1
Johnson v Buttress [1936] HCA 41, (1936) 56 CLR113 (17 August 1936), High Court (Australia).
2
Farmers Co-operative Executors & Trustees Ltd v Perks [1989] SASC 1932, (1989) 52 SASR 399.
In the Indian Contract Act 1872, Undue influence is defined under section 16 as:

(1) A contract is said to be induced by “undue influence” where the relations subsisting
between the parties are such that one of the parties is in a position to dominate the will
of the other and uses that position to obtain an unfair advantage over the other.
(2) In particular and without prejudice to the generality of the foregoing principle, a person
is deemed to be in a position to dominate the will of another-
(a) Where he holds a real or apparent authority over the other, or where he stands
in a fiduciary relation to the other; or
(b) Where he makes a contract with a person whose mental capacity is temporarily
or permanently affected by reason of age, illness, or mental or bodily distress.
(3) Where a person, who is in a position to dominate the will of another, enters into a
contract with him, and the transaction appears, on the face of it or on the evidence
adduced, to be unconscionable, the burden of proving that such contact was not induced
by undue influence shall le upon the person in a position to dominate the will of the
other.
Nothing is this sub-section shall affect the provisions of section 111 of the Indian
Evidence Act 1872 (I of 1872).

The doctrine of undue influence was evolved by the court of Equity in England,
and the same has been explained by Ashburner as under 3

In a court of equity if A obtains any benefit from B, whether under a contract or

as a gift exerting an influence over B which, in the opinion of the court, prevents B
from exercising an independent judgment in the matter in question, B can set aside the
contract or recover the gift. Moreover, in certain cases, the relation between A and B
may be such that A has peculiar opportunities of exercising influence over B. If under
such circumstances, A enters into a contract with B, or burden, if he wishes to maintain
the contract or gift, of proving that in fact he exerted no influence for the purpose of
obtaining it.
In this project, researcher will only focus on the presumed undue influence.

3
Ashburner on Equity, 2nd ed., p. 299.
AIMS AND OBECTIVES

1. The researcher tends to analyze the undue influence.

2. The researcher tends to highlight the presumed undue influence especially.
3. The researcher tends to highlight the cases related to presumed undue influence.

HYPOTHESIS

The researcher presumes that in every condition it has to be proved that defendant exerted
influence on the plaintiff.

RESEARCH QUESTION

1. What is Undue Influence?

2. What is Presumed Undue Influence?

RESEARCH METHODOLOGY

The researcher has relied upon doctrinal method of research to complete the project.

SOURCES OF DATA

The researcher has relied upon both primary as well as secondary sources to complete the
project.

(1) Primary Sources: Books.

(2) Secondary Sources: Material available on the internet.

LIMITATIONS OF THE STUDY

The researcher has territorial and monetary limitations in completing the project at hand.
Moreover, taking the time into consideration, the researcher has to rely upon the doctrinal
method of research.
 UNDUE INFLUENCE

Undue influence exists where a contract has been entered as a result of pressure which
falls short of amounting to duress, the party subject to the pressure may have a cause of
action in equity to have the contract set aside on the grounds of undue influence. Undue
influence operates where there exists a relationship between the parties which has been
exploited by one party to gain an unfair advantage. Undue influence is divided
into actual undue influence and presumed undue influence. Where a contract is
found to be entered into as a result of undue influence, this will render the contract
voidable. This will enable the person influenced to have the contract set aside as
against a party who subjected the other to such influence. In addition, in some instances
the party influenced may be able to have a contract set aside as against a party who was
not the person inflicting the influence or pressure.
The doctrine of undue influence was evolved by the Court of Equity in England, and
the sane has been explained by Ashburner as under 4:
“In a court of equity if A obtains any benefit from B, whether under a contract or or
as a gift exerting an influence over B which, in the opinion o the court, prevents B from
exercising an independent judgment in the matter in question, B can set aside the
contract or recover the gift. Moreover, in certain cases, the relation between A and B
may be such that A has peculiar opportunities of exercising influence over B. If under
such circumstances, A enters into a contract with B, or receives a gift from B, a court
of equity imposes upon A the burden, if he wishes to maintain the contract or gift, of
proving that in fact he exerted no influence for the purpose of obtaining it.”

Essnetials of undue influence

In order to constitute undue influence, it is necessary to prove that5:
(1) The relations subsisting between the parties are such that one of the
parties is in a position to dominate the will of the other; and
(2) Such a person uses his dominant position to obtain an unfair advantage
over the other.

4
Ashburner on Equity, 2nd ed., p. 299.
5
M. Rangaswami v. Rengammal, A.I.R. 2003 S.C. 3120.
 It is manifest that both the conditions have ordinarily to be established by
the person seeking to avoid the transaction: he has to prove that the other party to the transaction
was in a position to dominate his will and that the other party had obtained an unfair advantage
by using that position.

Undue influence may be categorized as follows:

1. Actual undue influence. The claimant must establish that the defendant used undue
influence in relation to particular transaction. There does not need to be any previous
history of such influence, although there is normally some relationship between the
parties, such as husband and wife.

2. (a) Special relationship. This category applies to certain established special “fiduciary”
relationships: parent and child; guardian and ward; religious advisor and disciple;
solicitor and client; and trustee and beneficiary (but not husband and wife). Such a
special relationship gives rise to a presumption of influence only, but not undue
influence. If the transaction in question is suspicious, i.e. it “calls for an explanation”,
then a second evidential presumption, of undue influence, will arise. This second
presumption, unlike the first, is rebuttable.

(b) No special relationship. This category covers cases where there is no special
relationship as explained above, but the relationship is nevertheless one of “trust and
confidence” where one party is in a position to exert undue influence over the other.
Following Etridge there is no longer any presumption of undue influence in such cases.
The claimant must show they placed trust and confidence in the defendant; once that is
established, then, where there is a transaction “calling for an explanation” an evidential
presumption that there has been undue influence will arise. It will be for the defendant
to prove that no such influence was exercised.

Thus, an inference of undue influence may also apply even if the relationship is not within one
of the special relationships but one party, by reason of the confidence reposed in him or her by
the other weaker party, is able to take unfair advantage.
For example, in Lloyds Bank Ltd v Bundy, CA, 1975, an elderly farmer gave the Bank a
guarantee in respect of his son’s overdraft and mortgaged the farmhouse to the Bank as security.
It was clear that the farmer had placed himself entirely in the hands of the assistant bank
manager and had been given no opportunity to seek independent advice. Although, normally,
the presumption of undue influence would not apply between bank and customer, the Court of
Appeal held that it did so here and the transaction was set aside.

It was later held by the House of Lords in National Westminster Bank Plc v Morgan, HL,
1985 that the transaction would only be avoided in such cases where the transaction itself was
“manifestly disadvantageous” to the weaker party. However in the Etridge case their Lordships
considered that the label “manifest disadvantage” should be abandoned in favour of a test of
whether the transaction “calls for an explanation”, thus adopting the dictum of Lindley J.
in Allcard v Skinner, 1887: i.e. is the transaction such as “not to be reasonably accounted for
on the ground of friendship, relationship, charity or other ordinary motives on which ordinary
men act?”

The evidential presumption of undue influence may be rebutted by the beneficiary of the
transaction showing that the other party exercised independent free will. This is normally done
by proving that the other party received competent independent advice. However, in
the Etridge case, the House of Lords indicated that the existence of independent advice may
not be conclusive.

In Lloyds Bank v Bundy, Lord Denning M.R. had sought to establish a doctrine whereby all
the instances where the courts intervene to set aside unconscionable transactions are based on
a single unifying principle, namely, “inequality of bargaining power”. In National
Westminster Bank v Morgan, the House of Lords refused to accept such a wide principle. Lord
Scarman said, “There is no precisely defined law setting limits to the equitable jurisdiction of
a court to relieve against undue influence”.
 PRESUMPTION OF UNDUE INFLUENCE

There are certain circumstances in which undue influence can be presumed:

1. Where he holds a real or apparent authority over the other.

Eg. Master and servant, parent and child, Income Tax officer and assesses principal and
a Temporary Teacher.

2. Where he stands in a Trust fiduciary (benefit) relation to the other.

Eg. Trustee and beneficiary with spiritual Guru and his disciples, solicitors and clients.

3. Mental Capacity of a person is temporarily or permanent effected by reason of age,

illness or mental or bodily distress.

Eg. Relationship between medical attendant and ward.

The equitable doctrine of undue influence operates to release parties from contracts that they
have entered into, not as a result of improper threats, but as a result of being ‘influenced’ by
the other party, whether intentionally or not.

The precise concept may be due for reconsideration, however at the present there are authorities
which are treated as being concerned with undue influence.

In Williams v Bayley, for example, the claimant had agreed to give a mortgage over his colliery
as security for debts incurred by his son, who had forged his father’s signature on promissory
notes. The creditors had threatened that the son would be prosecuted if the mortgage was not
given. The agreement was set aside as being obtained by undue influence. This case involved
‘pressure’ being placed on a party in much the same way as occurs with duress. It is possible
that the expansion in the type of threats which are now treated as potentially giving rise to
duress would mean that they would now be put in that category.
One of the main difficulties with undue influence, as with duress, is to find the limits of
legitimate persuasion. If it were impermissible to seek to persuade, cajole or otherwise
encourage people to enter into agreements, then sale representatives would all be out of a job.6

‘Influence’ in itself is perfectly acceptable: it is only when it becomes ‘undue’ that the law will
intervene. Clarity in deciding when that has occurred is not assisted by the fact that the word
‘undue’ has two potential meanings. It can be used to indicate some impropriety on the part of
the influencer.

The influence is ‘undue’ because an imbalance of power between the parties has been used
illegitimately by the influencer. Alternatively the word can be used simply to indicate that the
level of influence is at such a level that the influenced party has lost autonomy in deciding
whether to enter into a contract. This does not imply any necessary impropriety on the part of
the influencer.

There is an issue in whether the concept is ‘claimant-focused’ or ‘defendant-focused.’ If it is

claimant-focused, then what matters is whether the claimant acted autonomously in entering
into the contract; if it is defendant-focused, then what matters is whether the defendant has
deliberately taken advantage of the claimant’s weaker position.

How do the courts decide when influence has overstepped the limits of acceptability and
become ‘undue’? The basic test in English law is that it is only where there is some relationship
between the parties which leads to an inequality between them that the law will intervene. The
starting point for the law’s analysis is therefore not the substance of the transaction, but the
process by which it came about.

In relation to actual, the claimant must prove, on the balance of probabilities, that in relation to
a particular transaction, the defendant used undue influence. There is no need here for there to
be a previous history of such influence. It can operate for the first time in connection with the
transaction which is disputed. 7

An example of this type of influence is to be found in BCCI v Aboody8. Mrs. Aboody was 20
years younger than her husband. She had married him when she was 17. For many years, she

6
Smith, S, Contract Theory (2004).
7
Farnsworth, E A, Farnsworth on Contracts (2nd ed, 1998), volumes I and II.
8
[1992] 4 All ER 955
signed documents relating to her husband’s business, of which she was nominally a director,
without reading them or questioning her husband about them.

On the occasion which gave rise to litigation, she had signed a number of guarantees and
charges relating to the matrimonial home, in order to support loans by the bank to the
business. She had taken no independent advice, though the bank’s solicitor had at one meeting
attempted to encourage her to take legal advice. During that meeting, Mr. Aboody, in a state
of some agitation, came into the room, and through arguing with the solicitor, managed to
reduce his wife to tears.

It was held that although Mr. Aboody had not acted with any improper motive, he had unduly
influenced his wife. He had concealed relevant matters from her, and his bullying manner had
led her to sign without giving proper detached consideration to her own interests, simply
because she wanted the peace.

The Court of Appeal in this case held that Mrs. Aboody’s claim to set aside the transaction
nevertheless failed, because it was not to her ‘manifest disadvantage.’ The loans which she was
guaranteeing had, in fact, given the company a reasonably good chance of surviving, in which
case the potential benefits to Mrs. Aboody would have been substantial.

The risks involved did not, therefore, clearly outweigh the benefits. The House of Lords, in
CIBC Mortgages plc v Pitt, subsequently indicated, however, that ‘manifest disadvantage’ is
not a requirement in cases of actual, as opposed to presumed, undue influence. If similar facts
were to recur, therefore, a person in the position of Mrs Aboody would be likely to succeed in
having the transactions set aside.

Where actual undue influence is proved it is not necessary for the claimant to prove that the
transaction would not have been entered into but for the improper influence. This was the view
of the Court of Appeal in UCB Corporate Services Ltd v Williams. The position is analogous
to that applying to misrepresentation or duress: as long as the influence was a factor in making
the decision to enter into the transaction, that is sufficient.

In certain cases presumption of undue influence is raised. The effect of presumption is that
once it is shown that the defendant was in the position to dominate the will of plaintiff it will
be presumed that he must have used his position to obtain an unfair advantage. It will be then
open for the defendant to show the plaintiff freely consented 9. For example, in

Case:

Lancashire loans VS Black10

The defendant was married a girl of full age. She gave a security for the loan which her mother took
from a company. The only advise she has advise from the solicitor of the company.

Scrutton LJ held that in the case of contractual advantage obtain from a person coming with in certain
defined relations, such as the relation of parents and young child, solicitor and religious, client,
religious superior and inferior, by the related member of the that class, it is enough to prove the
existence of such a relation to through on the recipient of the advantage of the burden of proving
independence advise to the independent donor and in other respects justifying the transaction. His
lordship then pointed out that married women is not necessarily independence of the influence of her
mother, such cases should be delt with on there own facts, and not on any presumption. On the fact
of the case the court found that she was under the influence of her mother11.

Similarly, where a parade lady of 70 years, having three daughters, was supposed to have gifted her
entire land to the defendant, who was the tenant of that land, it was that land, it was held from the
position of his position of the land he must have dominated the women and burden lay up him to
show the circumstances of the gift. He being not able to do so, the gift deed was set aside.

The presumption is raised in the following cases;

1. Unconscionable Bargains,
2. Inequality of bargaining power.

9 Krishna Mohan kul V pratima Maity, (2004) 9 SCC 468: AIR 2003 SC 4351, burden on the person standing in fiduciary relationshi p.

10 (1934) 1 KB 380 CA.

11 For a survey of a large number of such cases see Che Som Binte Yip V. Maha P Ltd, (1989) 2 CLJ 802, 906-911, High court, Singapore.
1) Unconscionableness

Where one of the parties to contract is in the position of Domination the will of the other and
the contract is apparently unconsciobnable, that is, unfair, the law presumes that consent must
have been obtained by undue influence. The burden is shifted to the stronger party to move
that he did nothing to over bear the will of other. An instructive illustration is the decision of
thewill of other. An illustration is the decision of Privy Council in the Case:

Wajid Khan Vs Raja Ewaz Ali Khan12

An old and illiterate Woman, incapable of any business, conferred on her confidential
managing agent, without any valuable consideration, an important pecuniary benefit under the
guise of trust.

Their Lordship said that “all the facts of the case go to show that there was active undue
influence. The onus is on the grantee to show conclusive that the transaction is honest, bona
fide, well understand, the subject of independent advise and free from undue influence”.

Unconscionable in money leading transaction:

Unconscinable bargains have been witnessed mostly in money lending transaction and in gifts.
But the principle is not confined to such tractions only. In case before the Bombay high court,
a poor former, being unable to pay a loan, executed a sale deed in favour of the creditor of his
property three time the value of the sum due, the court granted relief by setting aside the sale
and allowing the former to pay back the lender within a fixed period.

12
(1890-91) 18 1 A 144
Position of domination necessary for presumption to arise:

It should, however, be borne in mind that the presumption of undue influence on the ground of
unconscionableness of the bargain is raised only when one of the parties on equal footing the
mere unconscionableness of the bargain does not create the presumption of undue influence. The
mere fact that the bargain is a hard one is no ground in itself for granting relief. The was pointed out
by the privacy council in the case

Inequality of bargaining power:

The presumption of undue influence may also rise from the fact that there is such an
inequalities of bargaining power between the parties that one can cause economic durness to
the other. The decisions of court of Appeal in the case:

Lloyds Bank Vs Bundy13

A contractor barrow a sum of money from bank. He could not pay back in time the banker
pressed for payment or for security. He suggested that his father might mortgage the family’s
only residential house. The bank offer visited the father and obtained his signature upon
readymade papers. The contractor still could not pay and the banker sought to enforce the
mortgage which might have meant throwing out the family from its only residence.
Accordingly Mr Bundy relied upon the unfair character of the motgage.

He allowed to set aside the mortgage. Lord Denning MR tried to locate the principles which
run through all the varied situation situations which relief is allowed on account of unequal
bargaining power. He said: “English law gives relief to one who, without independent advice,
enters into a contract upon terms which are very unfair, or transfers property for a consideration

13
(1975) 1 QB 326.
which is grossly in adequate, when his bargaining power is grievously impaired by reason of
his own needs or by his own ignorance or infirmity, coupled with undue influence or presser
brought to bear on him by or for the benefit of other.”

The bank exploited the vulnerability of father, cause by his desire to help his son to such an
extent that he charged his house to his ruin for every short moratorium, which was a highly
inadequate consideration for the mortgage.
 ROLE OF JUDICIARY

Understanding undue influence, dissecting it, defining it, and understanding the term,
has proven elusive in social service and legal settings. Some people have said, “I know
it when I see it,” making the term a matter of personal interpretation. Some state probate
laws reference the term, and a few states have definitions that can be summarized as:
Undue influence occurs when a fiduciary or confidential relationship exists in which
one person substitutes his own will for that of the influenced person’s will. Other states
have definitions in criminal or other codes. Of course, judicial decisions on individual
cases exist but they are usually known only in legal circles. 14

Most undue influence cases are seen in probate courts with petitions for guardianships,
conservatorships, and with disputed wills and trusts. Undue influence situations are also
seen in contract law with documents such as deeds, powers of attorney, and contracts.
It may also be present in some criminal cases. In all those situations, courts consider
evidence indicating that undue influence may or may not have already happened.

With the emergence of elder abuse and mandatory reporting of elder abuse over the last
three decades, community practitioners such as Adult Protective Services staff, hospital
discharge planners, physicians, and public health nurses who work directly with elders
have identified situations where it seems that undue influence is currently taking place.
Community professionals encounter circumstances where they believe it is happening,
where families feel helpless to intervene, and where elders are left penniless by scams,
sometimes by lottery scams initiated in other countries.

The issue is particularly important because the number of people over 65 is increasing
nationwide.

Definitions of undue influence have been difficult to legislate for many reasons. Undue
influence usually takes place behind closed doors and there are no witnesses. And,
adults are legally able to make decisions about their affairs unless a court has appointed
a guardian or conservator. For instance, an elder who is unduly influenced has the legal
right to spend his money on telemarketers even though it may jeopardize his assets.

14
Chitty on Contracts, (29th ed 2004).
Complicating the matter is that undue influence is often linked to impaired cognitive
capacity even though it frequently occurs when the elder clearly has capacity.

Complicating the matter even further, undue influence is present in many other
circumstances such as hostage situations, families, telemarketers, domestic violence,
prisoners of war, cults, and white collar crime. It could even apply to totalitarian
regimes that act to control populations since the elements are similar. Such a variety of
complex circumstances with varying levels of intensity have made it difficult to
formulate an overarching definition of undue influence.

Undue Influence Case

A petition was filed for the Public Guardian to be appointed the guardian of person
and estate for Ms. R. The Western Union office had contacted Adult Protective Services
with concerns about the amount of money Ms. R. was wiring to another country. Her
sister in Canada received notice of the petition and was certain that Ms. R. was being
“railroaded” into a guardianship. She immediately came to visit Ms. R. and observed
her speaking on the phone in a secretive manner several times a day. Ms. R. would not
tell her sister who the caller was or what the call was about.

Later it was learned that Ms. R. was talking to her “dear friend” who lived in a different
country and who was going to make certain that Ms. R. received a million dollars if
only she would send more money now—it was a Jamaican lottery scheme. Ms. R.
thought she was making investments. The sister became convinced that Ms. R. needed
the guardianship because she could not be talked out of speaking with her “dear
friend” and sending the money. She was on the way to impoverishing herself.

The court appointed a public guardian to serve as guardian of person and estate.

With this new statutory definition of undue influence, courts, attorneys, and community
practitioners have guidelines to assist them in determining if undue influence has
occurred or is occurring. The definition was purposefully written in lay terms so
community practitioners can utilize it more easily. Since specific examples of evidence
are included, undue influence may be more easily detected.
Implementation of the new definition, “where the rubber hits the road,” remains to be
seen. Education and training will be needed for the various professionals who encounter
undue influence. Attorneys will likely begin including the definition in their petitions
for conservatorship, wills, and trusts. Courts will then consider if undue influence has
taken place and if the decision is that it has occurred, will reflect that finding in court
rulings and opinions.

Community practitioners may better able to articulate what undue influence means and
to describe the specific circumstances in individual cases. The new law represents a sea
change in defining undue influence. Time will tell how the definition will be
implemented.
 ONUS/ BURDEN OF PROOF

Under sub-sec. (3) the burden of proving absence of undue influence can lie on the defendant
only in the event of the plaintiff discharging the initial onus of satisfying the court that the
defendant was in a position to dominate the will of the plaintiff, 15 but the circumstances of a
case may make an exception to that general rule, e.g., where a person stands in relation to
another in a position of active confidence are in a position to dominate the will of another. 16
Generally speaking ,the relation of solicitor and client, Trustee and cestui que trust, spiritual
advisor and devotee, medical attendant and patient, parent and child are those in which of
presumption of undue influence arises. 17 In an action to set aside a contract on the ground of
undue influence the initial onus, therefore, is on the party seeking relief to establish that the
other parties to the contract was in a position to dominate his will. Until it has been so
established, the burden does not lie upon the other parties of proving that the contract was not
induced by undue influence.where undue influence is not seriously disputed the burden lies
upon him who denies it to show that it was not used.18 The sub section presupposes that one of
the persons is in a position to dominate the will of another. Where this is not the case, the rule
regarding the burden of proof in acted in the subsection does not apply. 19 Subsection (3)
contains a rule of evidence which states that when word and shift on to the party benefiting by
the transaction he is to show that it was not induced by undue influence. Where, a contract is,
on the face of it, unconscionable it is the duty of the party seeking to enforce it to prove that
the contract was not induced by undue influence. The law requires that the party who sets up
undue influence must, to start with, established that there was active confidence between the
person executing the document and the person Under whose influence the document is said to
have been executed. In the case of gifts to near relations there will be no presumption of undue
influence comma the burden of proof does not lie on the donee, no in the case of female Donor
it is necessary to show that she had independent advice. In the case of a sale by a person young
in age and in distressed circumstances but not without advice or means of information of an
estate actually vested in him the party seeking to set aside the sale must establish the fraud
actual or constructive, which entitles him to relief. But comma in the case of sales by expectant
heirs of reversionary interests, the onus of proof is shifted upon the purchases. In a suit on a

15
Balbhadra v.Dhanpat 80 IC 213.
16
Palanivelu v Neelavathi 65 CLJ 295 (PC).
17
Subhas v Ganga AIR 1967 SC 876.
18
Azimunnissa v Siraj AIR 1934 All 507.
19
Abdul v Beni 171 IC 605.
promissory note executed by a young man the onus lies upon the defendant to prove that the
plaintiff advanced the loan for an Immoral purpose or that the promissory note was obtained
from the defendant by the exercise of undue influence by the plaintiff. When the people who
are nursing an elderly invalid got a transfer of practically the whole of his remaining property
in their favour to the complete exclusion and without the knowledge of the heir, it is for them
to prove the bonafides of the transaction. The elder brother and manager of a Hindu family
stands in a fiduciary relation to his weak-writted younger brother; the burden of proving the
absence of undue influence in procuring a deed of gift, from the younger brother, of his property
is on the elder brother. As has been observed by the privy Council20 “when a man has
committed a fraud, and has got property thereby, it is for him to show that the person injured
by his fraud and suing to recover the property has had clear and definite knowledge of those
facts which constitute the fraud at a time which is too remote to allow him to bring a suit”. The
same principle applies equally to a case of undue influence. Under article 91 (now article 59 of
limitation act 1963) the period within which a suit is to be brought is 3 years from the date
when the facts entitling the plaintiff to have the instrument cancelled are set aside became
known to him. Where the defendants agreed to give up the status of Inamdars and to pay a rent
of double the amount former League table for the land this apparently for no consideration
whatever the contract was unconscionable on the face of it; when such a contract was made by
the will of the former the burden of proving that the contract was not induced by undue
influence lay upon the Zamindars.21

Sale deed by a tribal women who was old, illiterate and blind in favour of her husband's
younger brother with whom she lived tilhar death and was dependent on him is void because
no consideration passed at the time of sale. it was held that a purchaser was in a position to
dominate and take advantage over her and as such the onus lay on him to prove that the sale
did was not executed under undue influence.the sale was held to be invalid and the advantage
thus obtained by him was directed to be returned. 22

20
Rahimbhoy v Turner 20 IA 1.
21
Rajah of Venkatagiri v Rachapoody 4 IC 1114.
22
Mst. Sethani V Bhana AIR 1993 SC 956.
 CONCLUSION

It is concluded that duress can and should be merged with actual undue influence. The
range of pressure which duress has expanded to include has resulted in an extensive
overlap between the two doctrines. Undue influence should subsume duress because it
is a wider doctrine and better equipped to deal with lawful pressure situations. Any
factual situations that cannot be dealt with using undue influence can be dealt with
utilizing un-conscionability. Therefore, given the recent developments of the three
doctrines, it is duress that is the superfluous doctrine. However, it is submitted that
undue influence and un-conscionability (and hence a three way merger) cannot be
achieved. While there is a substantial overlap between undue influence and un-
conscionability the substance, that is, the doctrinal elements of the two doctrines differ.

Conaglen provides a helpful summary:

[Undue influence] is concerned primarily with the close relationship between the two
parties and is determined to prevent any abuse of that relationship. The doctrine of
unconscionable bargains, on the other hand, is concerned more with improper
advantage being taken of a situation which has arisen as a result of cognitive defects in
the weaker party. Such defects give rise to a significant power imbalance between the
parties, but there need not be any special relationship between them aside from the fact
that they have come together to negotiate a transaction and one is aware that the other
is laboring under a special disadvantage. That in and of itself is not sufficient to create
the relationship which is so carefully protected by the doctrine of presumed undue
influence, but it will suffice under the doctrine of unconscionable bargains. 23

23
M D J Conaglen, ‘Duress, Undue Influence, and Unconscionable Bargains – The Theoretical Mesh’ (1999)
18(4) NZULR 509, p 531-2.
 BIBLIOGRAPHY

Webpages:

1. http://e-lawresources.co.uk/Undue-Influence.php
2. https://en.wikipedia.org/wiki/Undue_influence
3. http://www.advocatekhoj.com/library/bareacts/indiancontract/16.php?Title=Indian%2
0Contract%20Act,%201872&STitle=Undue%20influence%20defined

Books:

1. Contract-I by - R.K. Bangia

2. Dutt on Contract by – H.K. Saharay