3 Pages
853 Words
Question 1: Essay Plan for Evaluation of the extension of doctrines for the Unconscionability and Undue Influence for protecting Vulnerable Parties
1.0 Introduction
Unconscionability and “Undue Influence” as primary doctrines of contract law that preserve the parties from any specific sort of exploitative or unfair contract. These two doctrines were especially concerned with ‘fairness’ and ‘the consent’ especially where one party was particularly vulnerable (Liew, 2021). However the success of protection depends upon specific circumstances, factors some legal standards that evolve the contract law’s nature. Therefore, the following section elaborately describes the two major doctrines of Unconscionability and Undue Influence to identify the vulnerable protection for the parties from any type of unfair contract.
2.0 Discussion
2.1 Undue Influence Doctrine
Such kind of legal conception implies that one can bend the decisions of other people as wanted by virtue of authority. “Undue Influence” can be in two types “Actual Undue influence” and “Presumed undue influence”. The “Actual Undue Influence” lays down the manipulative features of the influencers, and the “Presumed Undue influence” lays down the relation where the significant disadvantages happen for the presumption of the vulnerable category of parties. The doctrine aims to protect access to power with special consequences for cases where one is likely to be in a vulnerable position like children with their parents, borrowers with their lenders, older people with their caregivers (Mills, 2023). This case laws of “Lloyds Bank vs Bundy (1975)” and “Royal Bank of Scotland vs Etridge (2001)” highlights whereby one of the parties particularly a financial institution or parties in close relationship compel the other into agreement which it would otherwise reject. In these cases the court may set aside those contracts which stem from “duress” thus easing the suffering of vulnerable persons being exploited from their contractual agreements.
Nevertheless, some crucial factors can be a drawback to achieving high effectiveness of the “Undue influence” doctrine. The first and foremost barrier is that burden where ‘Claim of a party in “Undue influence” will have to prove that the other party applied some improper pressure, which is not easy. In addition, what the law provides is that if the vulnerable party is in a specified list of relationships with the dominant party, it will be protected under the presumption of “Undue influence”.
2.2 Unconscionability Doctrine
“Unconscionability” is also legal type of principle that has been passed to avoid contracts enforcement that offer unfair benefits for one party. This doctrine is wider than “Undue influence” because while the latter has dealings with the relationship between the parties as well as the contract then this one also considers the content of the contract as well. Any contract is valid provided that the party which has power frees ride on the other party’s weakness or lack of sophistication to extract unfavorable terms and conditions from the weaker party will not be enforceable.
For example the case of “National Westminster Bank v Morgan (1985)” where the court decided that where a wife was forced into signing a guarantee for her husband’s overdraft, the contract could be cancelled. As understood by wife, the bank took the advantage and make the contract “Unconscionable”. Another case law of “Cresswell vs Potter (1984)” also forms an important part of it in which an elder man because of his capacity himself confined in a position to sign the contract in terms of property that was considered “unconscionable” (Legislation.gov.uk, (2025). This explains how unconscionability works to shield deserving candidates who maybe illiterate, sick, or in severe financial straits from signing “exploitative or unfair contracts”.
However, two criticisms also arise from the involvence of subjectivity, and the high threshold values for the unfair type of requirements under this “unconscionability” doctrines. Thus contracts, which can be considered as rather abusive or unfair, may be executed in the courts, which demand that the agreement must not reach the level of extreme unfairness.
Application of the “Contracts (Rights of Third Parties) Act 1999” affirms third parties rights to sue where the contract was unfair or exploitative for both doctrines to protect the vulnerable contracting parties. At the same time “Consumer Credit Act 1974” can be also applied for analyzing the “Doctrine of Undue Influence” and the “Doctrine of Unconscionability”.
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2.3 Comparison of existing doctrines
The problem with “undue influence” is that it is sometimes not very effective in safeguarding vulnerable parties adequately, for want of adequate evidence of coercion as well as for the fact that the concept only applies in a limited range of relationships. On the other hand “unconscionability” provides a wider basis for determining fairness which however may not guarantee parties against oppressive contractual clauses unless the clauses are unconscionable.
3.0 Conclusion
“Undue influence” and “unconscionability” are useful and unhelpful doctrinal constructs when seeking to reconcile vulnerable persons with unfair contracts. However, these provisions are restricted by their respective prerequisites; the onerous task of proving unconscionable conduct is also a drawback.
Reference List
Journals
- Liew, Y.K., 2021. ‘Unconscionability’and the case against lumping: three case studies. Trusts & Trustees, 27(1-2), pp.118-131.
- Mills, A., 2023. UNDUE RETICENCE ON UNDUE INFLUENCE?. The Cambridge Law Journal, 82(1), pp.21-24.
Website
- Legislation.gov.uk, (2025) Available at: https://www.legislation.gov.uk/ukpga/1999/31/contents [Available at: 17.01.2025]
