CONTRACT COURSEWORK 2002/2003 UNDUE INFLUENCE

For many years undue influence was a relatively undynamic area of law dealing mainly with gifts by elderly persons to their relations. However in recent years undue influence has increased dramatically in importance, especially in relation to contracts between banks and customers or guarantors and record companies/managers and artistes. You should note there have been a number of fairly recent cases on this subject and you are strongly advised to carry out an electronic search for recent developments. You might also look at recent articles in the law journals especially on the Etridge case TASK 1 o get a general feel for the subject read !hapter "# p $%# & $$' and !hapter "$ (ections % and $ of )oole*s casebook TASK 2 +ead the following key cases on undue influence ,,-Y.( /012 v /31.Y "45# $ 0,, E+ 565 10 7E( v 8-+901 "4'6 " 0,, E+ '%" !:/! v ): "44$ #0,, E+ #$$ /0+!,0Y( /012 v -*/+:E1 # 0,, E+ #"5 +-Y0, /012 -F (!- ,01. v E +".9E %;;" # 0,, E+ ##4 For the sake of convenience only the 0ll England +eports references have been cited. hese cases can also be found in the 7eekly ,aw +eports or obtained electronically. TASK 3 !heck for recent developments on the subject. +emember it is purely a case law topic. here is no legislation on the matter.

TASK 4 0nswer the following <uestion only from t ! "o#nt of $#!% of &n'&! #nfl&!n(!) *o& +r! not r!,&#r!' to (on-#'!r &n(on-(#on+.#l#ty or &nf+#r t!rm- l!/#-l+t#on Lisa and Mark have been married for five years and have two young children. They are joint owners of their home. They are partners in a restaurant business. However Lisa leaves the running of the business to Mark, preferring to stay at home and look after her children. Two years ago Mark informed Lisa that the time was right to expand the business by purchasing a second restaurant. To do so would re uire a bank loan of !"##,###. He tells her he had already spoken to their bank $Miser %ank& and the loan would be 'no problem( subject to a number of formalities being completed. Lisa then attended two meetings. The first was with Mark and the family solicitor Tim. )t this meeting Mark and Tim explain to her that in order to obtain the loan it will be essential for her to sign a document which will make her a guarantor of the loan and that her share of the house will be the security for the loan. Mark and Tim say nothing else about the agreement or the conse uences to Lisa if the loan cannot be repaid. The second meeting is with *hil, a Miser %ank employee. *hil is a family friend. Lisa has known him for "# years and has on occasions sought his advice on financial matters. +uring the meeting *hil says to Lisa ', think Mark-s plan to buy a second restaurant is a great idea.if , were you , would sign the guarantee agreement( Lisa signs the guarantee agreement $their house being security for the loan& and the loan is granted. However the second restaurant is a commercial failure resulting in heavy losses. Mark cannot afford to repay the loan and Miser %ank is seeking to enforce the security agreement against Lisa. ,t has just informed her it is going to seek a court order for possession of the house )dvise Lisa

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