Additional Notes on undue influence
It is a doctrine of equity that a contract, deed, donation, or testamentary disposition can be set aside if the court finds that someone has exercised undue influence over the maker at the time that the contract, conveyance, or will was made. To establish a prima facie case it is usually necessary to show a susceptibility to undue influence (as from mental impairment), the opportunity and disposition on someone's part to exercise such influence, and that the transaction would not have been made except for the undue influence.
Financial Definition of UNDUE INFLUENCE
What It Is
Undue influence occurs when one party to a transaction is able to influence the decisions of another party to the transaction.
How It Works
Anybody who's ever had a pushy girlfriend or boyfriend knows what undue influence feels like. Let's say John Doe for whatever reason lands in jail for a night. He calls his girlfriend, Jane Smith, to bail him out. She does so only on the condition that John signs a contract agreeing to purchase 40% of her pizza parlor business for $100,000.
John, wanting to get out of jail and not lose Jane Smith's affections, signs the contract. He does not do so with reasonable care because he is being pressured by the other party, which happens to have the upper hand over John.
Why It Matters
Undue influence gives one party an advantage over another. In some cases, a party that is the victim of undue influence may be able to void a contract he or she signed while under the effects of that influence.
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Dictionary: Definition of undue influence
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