Q: What are the examples of undue influence ?

Ans: Asif , a medical attendant  charges unfair advantage of Rs 30000 instead of Rs 5000 due to his dominating position from patient.

A person is deemed to be in a position to dominate the will of another:

a) where he holds a real or apparent authority over the other; or

b) Tax officer and tax payer

c) Police officer and accused being invested

d) Employer and Employee

e) where he or she stands in fiduciary relationship to other:

Parent and child

Guardian and minor

Advocate and client

Trustee and beneficiary

Fiance and Fiancee

f) where he makes a contract with the person whose mental capacity is temporarily and permanently affected by reason of age, illness or mental or bodily distress.

Doctor and patient

Medical attendant and patient

Family member and enfeebled old person

Example: Medical attendant and patient

Ameer,  a man enfeebled by disease or age agrees with Asif, his medical attendant to pay asif a large sum of professional services.

Analysis: 

Presumption of position to dominate is there. ( Contract with ill person).

Burden of proof on Asif( having position to dominate).

Large sum indicates unfair advantage.

This contract is said to be induced by undue influence.

Example: Teacher and Student.

Scenario: A teacher sold an agricultural property to his student,  Maqbool.

Later maqbool filed a suit to cancel the transaction.

Qaiser showed that he had provided complete facts relating to the property to Maqbool, the price was market based, Maqbool had obtained advice from the property dealers of his choice before finalising the contract.

Analysis: 

Burden on proof on Qaiser( being teacher might have the position to dominate).

Qaiser proved that he did not use his position to take any unfair advantage.

The consent was not caused by undue influence.

The contract is valid.

Example: Principal and Agent

Scenario: Asif, an agent agreed to sell stock of sajid (the principal) at 2 percent commission. Later, Asif demanded 5 percent commission being the market rate and on account that his consent was obtained by undue influence.

Analysis: There is no presumption of position to dominate.

Burden of proof lies on asif.

The contract will be considered valid if Asif could not prove undue influence.

Banker and customer:

Adeel applies to a banker for loan at a time where there is stringency in money market.  The banker declines to make the loan except at an unusually high rate of interest.  Adeel accepts the loan on these terms:

Analysis: No presumption of position to dominate.

There is transaction in ordinary course of business.

The contract is not induced by undue influence.

Family member and enfeebled old man