Deck 11: Undue Influence

Question 1

The concept of undue influence is a common law one.?

Answer 1

False

Question 2

The 'debtor' as agent analysis is apparently accepted in which of the following cases?

A) Barclays Bank v O'Brien
B) Kings North Trust v Bell
C) Coldunell Ltd v Gallon
D) Royal Bank of Scotland v Etridge (No.2)

Answer 2

B,C

Question 3

A creditor is deemed to have actual or constructive notice of a wife potentially under undue influence where which of the two are apparent?

A) A transaction is not on the face of it to the wife's financial advantage
B) The transaction has been conducted substantially or entirely without the wife's knowledge
C) The transactions relates to matters in which the wife would not normally be involved
D) There is a substantial risk that the husband has committed a legal or equitable wrong

Answer 3

A,D

Question 4

How does the law determine which relationships are likely to give rise to undue influence?

Question 5

Distinguish between the 'Class 2A' and 'Class 2B' relationships described by Lord Browne-Wilkinson in his judgment in Royal Bank of Scotland v Etridge (No.2)

Question 6

At what point does influence become 'undue'?

Question 7

How does the law deal with cases of 'presumed undue influence' that fall outside of the class of 'recognised relationships'?

Question 8

Is it correct for the law to determine that certain relationships are likely to almost always be relationships 'of influence'?

Question 9

How do cases involving undue influence sometimes interact with the rules on privity of contract?

Question 10

Why can privity of contract be problematic in respect of undue influence and how have the courts sought to ameliorate these difficulties?

Question 11

Why did Scott LJ doubt that agency provided a convincing basis for setting agreements made as a result of undue influence?

Question 12

In what cases have the courts ruled that a transactions is 'manifestly disadvantageous'?

Question 13

Does the House of Lords decision to use 'notice' as a basis for setting aside transactions procured under undue influence place too great a burden on lenders?

Question 14

In Etridge what steps does Lord Nicholls suggest must be taken by solicitors to ensure that a wife is properly informed of the nature of the transaction that is to be entered into?

Question 15

In which of the following relationships would undue influence be presumed?

A) Parents - minor child
B) Husband - wife
C) Trustee - beneficiary
D) Solicitor - barrister

Question 16

Which of the following are recognised categories of undue influence?

A) Anticipated undue influence
B) Implied undue influence
C) Actual undue influence
D) Presumed undue influence

Question 17

Undue influence is found when the defendants position, whatever is might be, has been abused.

Question 18

In Barclays Bank plc v O'Brien, the House of Lords drew on the classifcations of undue influence previously set out by the Court of Appeal in Bank of Credit and Commerce International SA v Aboody?

Question 19

Even where actual undue influence is found, unless it has operated to seriously prejudice the victim a contract cannot be set aside.

Question 20

It is appropriate to presume undue influence in certain relationships?

Question 21

In Allcard v Skinner a relationship between a priest and a parishioner was held to be a relationship of presumed influence?

Question 22

Presumed undue influence may be argued to exist in cases where the relationship between the parties is intimate or sexual in nature?

Question 23

Unless influence is presumed, it would take years if not decades for a relationship of influence to arise?

Question 24

The requirement of 'manifest disadvantage' is not applicable to cases of 'actual undue influence'?

Question 25

In which key case is it said that the distinction between influence and undue influence is determined by considering a transaction, 'failing proof to the contrary, is explicable only on the basis that it has been procured by undue influence'?

A) National Westminster Bank v Morgan
B) Royal Bank of Scotland v Etridge
C) Attorney-General v R
D) BCCI v Aboody

Question 26

In Lloyd's Bank v Bundy a relationship of undue influence was found to exist as a result of what?

A) The fact the bank employee was the son of the claimant.
B) The fact that the bank had refused to allow the customer to seek independent financial advice
C) Relationships between banks and customers fall into the category of 'presumed influence'
D) The course of dealings between the bank and claimants was of such a duration that such a relationship had come to exist.

Question 27

In National Westminster Bank plc v Morgan the House of Lords determined there was no relationship of trust and confidence between which two parties?

A) A bank manager and his sister-in-law
B) A bank manager and a male customer
C) A bank manager and a female customer
D) A bank manager and his female friend

Question 28

A guarantee given by one spouse for the debts of another is not usually thought to be one 'manifest disadvantage' for what reason?

A) A guarantee by a spouse if considered to be a manifestly disadvantageous
B) Because couple tend to be in business together - a guarantee would be for the benefit of the business
C) Because guarantees are seldom called upon so in reality it would not affect the guarantor
D) Because it would normally allow the guarantor to stay in the matrimonial home, which would be an advantage

Question 29

In which of the following cases was the court persuaded to rescind a contract on the basis of undue influence?

A) TSB Bank v Camfield
B) HSBC Bank plc v Whalid
C) Dunbar Bank plc v Nadeem
D) HSBC Bank plc v Kemp

Question 30

What are the remedies typically used in respect of contracts entered into under undue influence?

Question 31

Which of the following is not a requirement for establishing undue influence?

A) A relationship between the parties
B) Inequality
C) An abuse of the relationship
D) A substantially unsatisfactory transaction

Question 32

What is meant by 'actual' undue influence?

A) That undue influence was exerted in a particular transaction
B) That a relationship exists where undue influence is possible
C) That a threat was used
D) That a reasonable person would be influenced

Question 33

Which of the following relationships is not a category of automatically presumed influence?

A) Parent-child
B) Doctor-patient
C) Solicitor-client
D) Husband-wife

Question 34

In which case did Lord Denning propose a general principle of 'unconscionable bargaining'?

A) Lloyds Bank v Bundy
B) RBS v Etridge
C) Natwest v Morgan
D) Bell v Lever Bros

Question 35

The principle of undue influence:

A) Contradicts the principle of duress
B) Is not in connection with the principle of duress
C) Supplements the principle of duress
D) Violates the principle of duress

Question 36

A contact entered into under undue influence is

A) Voidable and damages are available
B) Subsisting and damages are available
C) Voidable and damages are unavailable
D) Subsisting and damages are unavailable

Question 37

Undue influence is:

A) An equitable concept
B) A common law principle
C) A statutory principle
D) A PECL concept

Question 38

Undue influence in a contractual relationship can be found when:

A) The influenced party has lost autonomy in the decision making
B) There is an illegitimate use of an unbalanced power
C) Both of the above
D) None of the above

Question 39

The case of Royal Bank v Scotland v Etridge (2001) highlights what?

A) The requirements to prove a relationship of trust and confidence
B) The grounds upon which the court will set aside a contract for duress
C) The practical steps to be taken by debtors to avoid repossession
D) The practical steps to be taken by creditors when put on inquiry

Question 40

Who is a surety?

A) the bank
B) a person who guarantees the debts of another
C) a solicitor who advises a creditor
D) a solicitor who advises a debtor on the risks of a transaction

Question 41

In cases of undue influence, in which judgment did Lord Browne-Wilkinson develop the application of the doctrine of notice?

A) CIBC Mortgages plc. v Pitt (1994)
B) B. Barclay's Bank v O'Brien (1994)
C) Royal Bank of Scotland v Etridge (No2)(2001)
D) Dunbar Bank plc. v Nadeem (1998)