Undue influence occurs where one person has acquired an influence over another, to the point where the latter is no longer able to make decisions for themselves but instead must take the former’s decisions as their own. The circumstances in which it occurs can vary, from simple verbal coercion to subtle manipulation of a person’s mental or physical state; even if it is unclear whether the affects of undue influence on the party were voluntary or involuntary, the transaction may still be invalidated on court order.

Undue influence can take many forms, such as fraudulent misstatement, fraud in the execution of a contract, duress, and reliance upon false information provided by someone in power. The greatest danger is associated with vulnerable individuals, as they are more likely to be exploited. This includes those with physical or mental impairments or those whose age, inexperience or lack of education lead to them to lack the necessary understanding or wherewithal to make an informed decision.

When considering if undue influence occurred in a contract, the court looks at three tests: the nature of the relationship between those concerned; the nature of the transaction; and the conduct of the parties involved. In particular, if there is evidence of a fiduciary relationship between the parties, then this is a strong indication of undue influence.

In legal proceedings, the party alleging undue influence must prove that the act occurred, by showing that it is more likely than not that it did. Legal remedies for undue influence include rescission of the contract, an order to reinstate the victim’s rights, and damages.

In today’s society, there is often a power imbalance between parties, and as such, it is all the more important to be aware and protect oneself against exploitation through undue influence. Awareness of the signs of undue influence and compliance with the law should be the first steps in avoiding becoming a victim.