PRESUMPTION OF UNDUE INFLUENCE

SUBMITTED BY-
ASHUTOSH KUMAR, B.A., LL.B.(HONS.)
(2’nd Semester), (Roll No.- 2114)
SUBMITTED TO-
Mrs. SUSHMITA SINGH
This rough draft is submitted in partial fulfilment in Law of Contracts - I for the
completion of B.A., LL.B.(HONS.) course.

FEBRUARY 2020
CHANAKYA NATIONAL LAW UNIVERSITY,
PATNA

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 INTRODUCTION
In jurisprudence, undue influence is an equitable doctrine that involves one person taking
advantage of a position of power over another person. This inequity in power between the
parties can vitiate one party's consent as they are unable to freely exercise their independent
will.1

Where it is established that a plaintiff was induced to enter into a contract or transaction by
the undue influence of the defendant, the contract may be rendered voidable. If undue
influence is proved in a contract, the innocent party is entitled to set aside the contract against
the defendant, and the remedy is rescission.

As the law of undue influence was applied and developed by the court of Chancery, it
developed into two distinct classes:” actual” undue influence and “presumed” undue
influence.

In Australia, the leading case on undue influence is Johnson v Buttress (1936) in which the
approach to 'actual' and 'presumed' undue influence was at issue.

 Actual undue influence2, where it is proven that the defendant exerted influence over
the complainant to have them enter into a contract.
 Presumed undue influence, made up of:
1. deemed relationship of influence, relationships that raise the premise, as a
matter of law, that influence has been utilised;
2. relationship of influence in fact, where the complainant ensconces that trust
and confidence was bestowed in the wrongdoer and therefore a presumption of
influence should be recognised.

In the Indian Contract Act 1872, Undue influence is defined under section 16 as:

1. 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 a position to dominate the will
of the other and uses that position to obtain an unfair advantage over the other.
2. In particular and without prejudice to the generality of the foregoing principle, a
person is deemed to be in a position to dominate the will of another-

1
Johnson V Buttress [1936] HCA 41, (1936) 56 CLR113 (17 August 1936), High Court (Australia).
2
Farmers Co- operative Executors & Trustees Ltd V Perks [1989] SASC 1932, (1989) 52 SASR 399.

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 a) Where he holds a real or apparent authority over the other, or where he stands
in a fiduciary relation to the other; or
b) Where he makes a contract with a person whose mental capacity is
temporarily or permanently affected by reason of age, illness, or mental or
bodily distress.
3. Where a person, who is in a position to dominate the will of another, enters into a
contract with him, and the transaction appears, on the face of it or on the evidence
adduced, to be unconscionable, the burden of proving that such contact was not
induced by undue influence shall le upon the person in a position to dominate the will
of the other.
Nothing is this sub-section shall affect the provisions of section 111 of the Indian
Evidence Act 1872 (I of 1872).

The doctrine of undue influence was evolved by the court of Equity in England, and the same
has been explained by Ashburner as under3

In a court of equity if A obtains any benefit from B, whether under a contract or

as a gift exerting an influence over B which, in the opinion of the court, prevents B from
exercising an independent judgment in the matter in question, B can set aside the contract or
recover the gift. Moreover, in certain cases, the relation between A and B may be such that A
has peculiar opportunities of exercising influence over B. If under such circumstances, A
enters into a contract with B, or burden, if he wishes to maintain the contract or gift, of
proving that in fact he exerted no influence for the purpose of obtaining it.

AIMS AND OBJECTIVES

1. The researcher tends to analyse the Undue Influence.

2. The researcher tends to highlight the Presumed Undue Influence especially.

3. The researcher tends to highlight the cases related to Presumed Undue Influence.

3
Ashburner on Equity, 2’nd ed., p.299.

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 HYPOTHESIS

The researcher presumes that in every condition it has to be proved that defendant exerted
influence on the plaintiff.

RESEARCH QUESTIONS

1. What is Undue Influence?

2. What is Presumed Undue Influence?

RESEARCH METHODOLOGY

The researcher has relied upon doctrinal method of research to complete the project.

SOURCES OF DATA

1. Primary Sources: Books.

2. Secondary Sources: Material available on the internet.