Undue Influence

Publication Date :

08 Apr, 2025

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Table of Contents

Undue Influence Meaning

Undue influence refers to a relationship between parties in which one party has a dominant position over the other, which can be used to gain an unjust advantage. Its recognition protects vulnerable individuals from exploitation by stronger parties.

Undue influence arises in relationships with inherent power dynamics, such as between a patient and doctor or a parent and child. It often leads to possible voidable contracts to agreements. Moreover, it safeguards free will and free and informed consent. Courts take cognizance of contracts unduly influenced and set aside wills or contracts.

Key Takeaways

Undue influence means gaining an unjust advantage by a party in a relationship that tries to protect vulnerable individuals from exploitation by ensuring the stronger person.
It involves four elements: vulnerability, authority, tactics, and inequitable outcomes.
It is of three types: direct, recognized risk relationships, and presumed influence arising out of natural dominance or trust in a relationship.
It involves the exploitation of power or trust to manipulate someone's decision.
Conversely, duress involves using force or threats to compel someone to enter into an agreement, while coercion entails an unwillingness to enter into contracts due to threats or force.

Undue Influence In Contract Law Explained

Undue influence represents the act of one person depriving another person of his exercise of freedom of selection or superimposing another person's choice over the other person's desire or choice. It happens when one of the parties has a higher power position relative to the other due to emotional ties, status elevation, or better education. These dominant individuals force the other to decide for their long-term interests instead of benefiting the weaker party.

It follows the equitable doctrine involving one individual leveraging his powerful position on the other person's interest. When power is imbalanced between individuals in a will or contract, the weaker party's consent becomes vitiated. This imbalance prevents them from exercising any degree of their free will. Hence, the stronger party takes advantage of the vulnerable position of the weaker party. Nevertheless, if a weak party feels an unjust influence on them, then they have the right to declare the contract of will as void.

They may also take legal recourse for the exploitation meted out to them by the stronger party. It mostly happens in the case of undue influence in a will. In any relationship, the onus of proving that the influence of undue nature was not used lies on the powerful person. However, in most situations, prior interaction between the parties is enough to accuse one party of exploiting the other for their benefit.

Elements

In American law, there are four elements of unjust influence:

Element 1: The person experiencing undue coercion must be vulnerable. Moreover, the powerful influencer has to be aware of the vulnerable status of the other party. The vulnerability in such cases could be illness, incapacity, disability, emotional distress, dependency, age, education, and damaged cognitive function.

Element 2: The wrongdoer or influencer must have higher or assumed authority over the vulnerable person. The person in authority can be a legal representative, spouse, family member, home health worker, advisor, doctor, trust beneficiary, pastor, caregiver, or fiduciary.

Element 3: Tactics of unjust influence on the vulnerable victim for their persuasion must be determined and brought out as evidence. The tactics include- false affection, trickery, flattery, intimidation, coercion, deception, and insinuations.

Element 4: After the above three elements are fulfilled, the outcome of the undue influence must be inequitable. This means that, in addition to the economic losses faced by the designated beneficiaries, it can extend to the dishonoring of original wishes in a tampered will.

Types

It occurs when the innocent party becomes dependent and involuntary due to being overbearing. There are many cases of undue influence, which can be categorized into the following three types:

Class 1

Class 1 refers to real influence, which is undue because of the direct use of power, causing the act to cease being voluntary and free. This type of influence includes threats or violent actions used to obtain a particular benefit.

Class 2A

Here, any influence of undue nature exists presumably in any recognized risk relationship. As such, examples of relationships include parent and child, guardian and ward, religious leader and disciple, solicitor and client, doctor and patient, and trustee and trust beneficiary.

Class 2B

Any presumed influence of undue nature due to the proven existence of a relationship having confidence and trust where one party has natural dominance over the other and/or trust or dependent on their part. It includes illiterate–literate type relationships.

Examples

Let us use a few examples to understand the topic.

Example #1

A 90-year-old widow, Evelyn, was assigned as trustee of the family trust. Her nephew, Mark, tries to overtake the control of her trust. Mark issues undue influence threats to Evelyn to retire. But she is not willing to do so. Moreover, Mark threatens her to cut all familial ties and stop all financial and other help to sustain her old age.

As a result, she is afraid of becoming isolated and without any proper resources to continue her livelihood. At last, she succumbs to his pressure, signs a resignation letter, and hands over the trusteeship to Mark. Mark uses his powerful position and Evelyn's vulnerable state to get her resignation despite her unwillingness, which is recognized as undue influence.

Example #2

An online article published on 20 May 2024 discusses Red Lobster's filing of Chapter 11 bankruptcy. The chain filed for US bankruptcy protection in Orlando with the objective of enhancing operations, selling the majority of assets, and reducing locations. As a result, almost 100 restaurants of the chain have closed while others have remained open.

Moreover, the chain has been investigating the undue influence exerted by the Thai union on its shrimp business. This investigation concerns a loss of EUR 10 million or $11 million incurred from the promotion of Ultimate Endless Shrimp. It should be noted that the Thai union, which acquired Red Lobster after investing in it in 2016, has allegedly influenced supply decisions. This is because the former CEO decided to set the promotion price at EUR 18.41 or $20 permanently, causing substantial financial strain to the company.

Effects

Such influence has certain effects, as shown below:

It makes the contract between parties voidable, allowing the influenced person to either rescind or affirm it.
Decision are made under pressure instead of free will.
Most of the familial relations come under the category of such influence that affects all the legal transactions happening there.
It creates a sense of liability due to meaningless legal action threats.

Undue Influence Vs. Duress Vs. Coercion

Let us use the table below to understand the differences between the three:

Undue Influence	Duress	Coercion
Comprises of exploitation of a powerful position or trust to make someone's decision out of manipulation.	Consists of using actual force or threats to force someone to sign an agreement or contract.	Involves an unwilling person who has to enter into a contract with others due to threats or force.
The influence is often subtle. It could involve psychological manipulation.	The force or threats often involve immediate harm or violence.	It can be both physical and psychological. It can involve threats of harm or other adverse consequences.