Define the Term Undue Influence and Its Effect on Contract

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Undue influence is a legal term that refers to a situation where a person takes advantage of his or her position of power or trust to influence another person into signing a contract that is not in their best interest. This can happen in situations where there is a power imbalance between the two parties, such as in cases where one party is much older and vulnerable, or where a person is under duress or coercion.

The legal definition of undue influence is that it is «influence exercised by one person upon another over which the influenced party has no control and which leaves the latter with no alternative but to act according to the will of the influencing party.»

The effect of undue influence on a contract is that it renders the contract voidable. This means that the party who was unduly influenced can choose to either rescind the contract or affirm it, depending on the circumstances of the case. In order to do this, they will need to prove that the other party exerted undue influence on them when they signed the contract.

There are a number of factors that a court will consider when deciding whether or not undue influence occurred. These include the nature of the relationship between the parties, the timing and circumstances of the transaction, and the level of sophistication and understanding of the parties involved.

One common example of undue influence in contract law is when a financial advisor takes advantage of an elderly client by persuading them to invest in risky or inappropriate investments. In this case, the advisor may be found to have exerted undue influence on the client, and the contract may be invalidated.

In conclusion, undue influence is a serious issue in contract law that can have a significant impact on the validity of a contract. It is important for all parties to understand the nature of their relationship and to ensure that any agreement they enter into is made freely, without any undue pressure or influence. If you suspect that you have been unduly influenced into signing a contract, it is important to seek legal advice immediately.