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QUESTION Jacy Williams is a wealthy and elderly woman in her mid-seventies. Jacy stays alone in a house she and her husband, John, bought when they first married. John died ten years ago and since then, Jacy has become increasingly friendly with her immediate neighbour, Linda. Linda drops by often to visit Jacy; they have long afternoon teas and Jacy sees to Linda for her financial matters as Jacy has mild dyscalculia (difficulty with arithmetical skills). Jacy has been thinking of selling her h ...

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Tags: Australia Melbourne Management maths University of Melbourne Humanities 

Solutions

Issue 1

Whether Jacy would be able to set aside the contract for the sale of house to Linda under the provisions of undue influence

Rule

The Doctrine of undue influence had been introduced as an equitable Doctrine in order to prevent a person from taking advantage of another person because of the position or power over such person. The position or power one person has over another party can manipulate the capacity of the other party to provide free consent in relation to contractual dealings.

In situation where it can be proved that a party to the contract had been influenced or induced to enter into the transaction or contract through the use of undue influence of another party the contract which is formed may be set aside on the option of the weaker party. Thus in case the elements of undue influence is found the contract is voidable on the option of the weaker party and can be set aside to the remedy of recession.

One of the landmark cases in relation to undue influence in Australia is the case of Johnson v Buttress[1]. In this case an approach in relation to presumed and actual undue influence was addressed. Actual undue influence takes place when it is shown that the defendant had used influence over the plaintiff to make them enter into a contract. On the other hand presumed undue influence takes place when there is a deemed relationship of

 

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