Undue influence

Sociology | Mercantile Law | International Law | International Relations

Undue influence is defined by Sec.16(1) as, “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 position to dominate the will of other and uses that position to obtain an unfair advantage over the other.”

When a person, is deemed to be in a position to dominate the will of another, is defined by Sec.16(2) as, “When he holds real or apparent authority over the other. Capacity is temporarily or permanently affected by reason of age, illness or mental or bodily distress.”

In order to establish the presumption of undue influence, two essentials have to be proved:

  1. The relation between the parties is such that one of them is in a position to dominate the will of the other, and
  2. The party uses that position to obtain an undue influence over the other.

How to rebutt the presumption?
The party deemed to use the undue influence can rebutt the presumption by showing that:

  1. Full disclosure was made regarding all facts of the contract
  2. Consideration was adequate
  3. Dominated party was in a position to receive independent advice.


  1. Father purchased a car from his son for Rs.500,000 while the actual price of car was Rs.800,000. Later on son took the case to the court. The court annul the contract on the basis of undue influence used by father.
  2. A, being in debt to B, the police officer, contracts another loan to A on high interest rate. Later on, A repay first loan to B, and took the case to court for the second loan (the loan on high interest rate). The court annul the contract on the basis of undue influence used by B.

Cases giving rise to the presumption of “undue influence”, when the relation between the parties is:

  1. Parent and Child
  2. Guardian and ward
  3. Fiance and Fiancee
  4. Trustee and Beneficiary
  5. Doctor and Patient
  6. Solicitor and Client

No such presumption exists in the following cases:

  1. Husband and wife
  2. Landlord and Tenant
  3. Creditor and Debtor

Effect of undue influence
A contract induced by undue influence is voidable at the option of the party whose consent was caused by undue influence. The party may uphold the contract or reject it.