§ 4. Duress.

A contract is voidable at the option of one of the parties

if he have entered into it under Duress.

Duress consists in actual or threatened violence or impri- In what it

sonment; the subject of it must be the contracting party

himself, or his wife, parent, or child ; and it must be inflicted

or threatened by the other party to the contract, or else by jL^o"^, Abr.

one acting with his knowledge and for his advantage.

A contract entered into in order to relieve a third person Must aflfect

from duress is not voidable on that ground ; though a simple h^^J^^^^^;.

contract, the consideration for which was the discharge of a craj'acf'is?.

156 FORMATION OP CONTRACT. Part II.

p.*7t"*'' ^ird party by tbe promisee from an illegal imprisomnent,

would be void for unreality of consideration.

Nor is a promise voidable for duress which is made in

AUecv.Back- considcmtion of the release of goods from detention. If the

house, 3 M. & D

^ d^ detention is obviously wrongful the promise would be .void

be personal, for waut of consideration ; if the legality of the detention

was doubtful the promise might be supported as a compro-

mise. But money paid for the release of goods from wrongful

detention may be recovered back in virtue of the quasi-con-

seeA'pp.A. tractual relation created by the receipt of money by one

person which rightfully belongs to another.

§ 5. UamuE Influence.

Undue We have described the kind of Fraud which gives rise

m uence ^ ^^ action of deceit and the effect of Fraud of that de-

scription upon the validity of a contract But it may

well be that persons may be induced to enter into contracts

not by any specific statement of a fraudulent character,

but by reason of circumstances placing it in the power of

others to engage them in disadvantageous bargains or pro*

mises.

arises from Courts of Equity have always gone further than Courts of

a course of . . » .

conductor Law in the interpretation which they have given to the

stances o™' *®"^ Fraud. Looking beyond definite false and fraudulent

the rela- statements, they have inferred from a long course of conduct,

tions of the , , . . i .

parties, not from the peculiar relations of the parties, or from the cir-

nk™state^ cumstances of one of them, that an unfair advantage has

ment. i)een taken of the promisor, and that his promise ought

not in equity to bind him. ' The taking of such an unfair

advantage is sometimes called Fraud; but it is more con-

venient, for the purpose of distinguishing it from the kind

of Fraud with which we have already dealt, to call it the

exercise of * Undue Influence.'

Chap. IV. § 5. TJNDtTE INFLUENCE. 157

The subject is one wMch can only be dealt witb in tbe

most general way; it depends upon the view taken by a

CouTt of Equity of the general tendency of transactions, often

extending over some time, and consisting of many details,

whether or no relief is granted. It is significant of the

nicety of the questions bf fact involved in cases of this de-

scription, that in a recent judgment of the House of Lords cRorke v.

on appeal from the Irish Court of Chancery, Lord Hatherley ^3^-,'^^^

differed from Lords Blackburn and Gordon as to the pro-

priety of granting relief, and the whole Court differed from

Lord Justice Christian as to the moral character of the acts

complained of.

It is well to try to obtain some sort of definition of Undue Definition

Influence before endeavouring to classify the sets of circum- influence,

stances which have been held to suggest its existence. The

best is to be found in the judgment of Lord Selbome in The

Ea/rl of AyTesford v, Morris, In speaking of the sort of l. R- s ch.

cases * which, according to the language of Lord Hardwicke,

raise Jrom the circumstcmces and coTvditions of the ^parties

contracting a presumption of Fraud, he says, * Fraud does

not here mean deceit or circumvention ; it means an wncon-

seientious use o/the pouter arising out of these circiumstances

omd conditions ; and when the relative position of the parties

is such as primdfacie to raise this presumption, the trans-

action cannot stand unless the person claiming the benefit

of it iff able to repel the presumption by contrary evidence,

proving it to have been, in point of fact, fair, just, and

reasonable.'

In attempting to ascertain the principles upon which this

presumption is raised, we may note at starting —

(a) that equity will not enforce a gratuitous promise even ^dceiwich v.

though it be under seal ; ' ^- ^' ^' '^•

(/3) that the acceptance of a voluntary donation throws g°|j;j°j;^-5

Beav. 399.

158

FORMATION OF CONTRACT.

Part II.

WoodT. Abrey,

3 Maddock,

423*

Coles T. Treco-

thick, 9 Ves.

346.

Certain re-

lations of

parties :

7 Beav. 560.

parental ;

upon the person who accepts it the necessity of proving

' that the transaction is righteous ; '

(y) that inadequacy of consideration is regarded as an

element in raising the presumption of Undue Influence or

Fraud ;

(d) but that mere inadequacy of consideration will not

(according to the strong tendency of judicial opinion) amount

to proof of either.

We may therefore frame the question which we have to

discuss somewhat in this way : — When a man appears in a

Court of Equity, either as plaintiff or defendant, seeking

to escape the effects of a grant which he has made gra-

tuitously or a promise which he has given upon a very

inadequate consideration, what must he show in addition to

this in order to raise the presumption that Undue Influence

has been at work ? v

One class of circumstances calculated to raise this pre-

sumption appears to be that the party benefited stood in

some such relation to him as to render him peculiarly subject

to influence. Parental or quasi-parental relations subsisting

between promisor and promisee will raise this presumption.

In Archer v, Hudson, a young lady who had just attained

her majority became security for her uncle who was desirous

of overdrawing his account at his banker's. The Master

of the Rolls, adverting to the fact that the security was

obtained through the influence of a person standing in loco

parentis from the object of his protection and care, said^

'This is a transaction which under ordinary circumstances

this Court will not allow This Court does not

interfere to prevent an act even of bounty between parent

and child, but it will take care (under the circumstances in

which the parent and child are placed before the emancipa-

tion of the child) that such child is placed in such a position

as will enable him to form an entirely free and unfettered

judgment, independent altogether of any sort of control.'

Chap. IV. §5. UNDUE INFLUENCE. IKQ

And one may extend the term ' parental relations ' to all

cases in which one member of a family exercises a substan-

tial preponderance in the family councils either from age or g^„7JBeav

from character or from circumstances. *^

The power which a spiritual adviser may acquire over spiritual ;

persons subject to his influence is also looked upon as raising Bazdy. u'

the presumption of mala fides ; and to this may be added

a number of relations which it is somewhat hard to define,

but which may generally be termed * confidential.* Solicitor confiden-

or advocate and client, guardian and ward, doctor and patient,

trustee and cestui que trust, are some of these.

But the Courts- have shown themselves unwilling to limit Or influ-

♦ 6nc6 how-

or defibae the relations which they will regard as raising the ever'ac-

presumption of influence, being more inclined to reserve to ^^pi-™^^

themselves the power of enquiring whether influence was in sumption

. , . I M •!• <• 1 • of unfair

fact exercised, than to reject the possibility of such exercise dealing.

because the parties did not stand in certain special rela- con?^cS!

tions. The principle applies to every case where * influence '° ^ -sa^-saQ-

is acquired and abused, where confidence is reposed and

betrayed.'

In Smith v, Kay, the defendant, who had barely attained 7 h. l. c. 750.

his majority, had incurred liabilities to the plaintiff by the

contrivance of an older man who had acquired a strong in-

fluence over him, and who professed to assist him in a career of

extravagance and dissipation. It was held that influence of

this nature, though it certainly could not be called parental,

spiritual, or fiduciary, entitled the plaintiff to the protection

of the Court.

• It is not,' said Lord Kingsdown, * the relation of solicitor

and client, or trustee and cestui que trusty which constitutes

the sole title to relief in these cases, and which imposes upon

those who obtain such securities as these the duty, before

they obtain their confirmation, of making a free disclosure

of every circumstance which it is important that the indi-

vidual who is called upon for the confirmation, should be

l6o FORMATION OP CONTRACT. Part 11.

apprised of. The principle applies to erery case where

inflnenoe is aequired and abused, where confidence is reposed

and betrayed. The relations with which the Court of Chan-

cery most ordinarily deals are those of trustee and cestui que

trust, and such like.^ It applies specially to those cases, for

this reason and for this reason only, that from those reLations

the Court presimtes confidence put and inflvanee exerted.

Whereas in all other cases where those relations do not sub-

sist, the confidence and the vnflueruse mtut be proved eotstrinai-

cally ; but where they are proved extrinsically, the rules of

reason and common sense and the technical rules of a Court

of Equity are just a» applicable in the one case aa the

7H. L.C. 779. other/

Or personal The doctrine has been extended to » class of cases from

influciice

may be ab- which the element of personal influence is altogether absent.

sent, j^ remains to consider the characteristics of these eases.

as in catch- They all appear to possess these common features : the

insf bar-

gains. promisor encumbers himself with heavy liabilities for the

sake of a small, or, at any rate, an inadequate present gain ;

and the promisee takes advantage either of the improvidence

and moral weakness, or else of the ignorance and unprotected

situation, of the promisor.

Attempts ^^ former times the law attempted to guard in two ways

to prevent afiKkinst advantafi^e beinff taken of persons in such a situation.

such bar- ® .

gains : Usury Laws provided that a promise to pay interest beyond

by statute ; ^ certain rate per cent, should be void, and thus prevented

by judicial extortionate loans of money. And the Court of Chancery

adopted a rule that the purchaser of any reversionary interest

might always be called upon to show that he had given full

value for his bargain, so that he might not take advantage

of a man's present necessities to deprive him of his future

estates without reasonable return.

The Usury Laws are repealed, and the 31 Vict, c 4 abro-

gates the rule of law as to reversionary interests in all case^

Chap. IV. § 5. UllDUfi INFLIISKeB* 161

el purcKasea made hw^ fids and without fraud or oafaiv

dealing. But if % man takes advantage of the present Modem

poYortj of ap expectant heir to extort from him an exorbi-. "^x^lt

tant and ruinous rate of interest, he is liable to have the P^^^

bargain Bet aside, and to be remitted to his claim lov so Lord Avies-

,.--,_ ford V. Morris.

much money as he has actuallj advanced, with the legal ^^^ch.

rate of interest upon it.

And, on similar grounds, a man who bargains on terms

of inequality as to age or knowledge with the promisee is

considered to be entitled to the protection of the Court

of Chaocery. 'In ordinary cases each party to a bargain

must take care of his own interest, and it will not be pre- person in

sumed that undue advantage or contrivance has been resorted u-ess,'^

to on either side ; but in the case of " the expectant heir,"

or of persons under pressure without adequate protection,

and in the case of dealings with uneducated, ignorant persons, or ignorant

the burden of showing the fairness of the transaction is advised.

thrown on the person who seeks to obtain the benefit of the £«' J-o"* ,

^ Hatherley in

contract.' BoUngbrote,

The Court will look not merely to the acts of the parties, ca.atp.82?:

but to the reasonableness of the transaction under all the

circumstances of the case; and if it appear that one has

taken advantage of the unprotected condition of the other to

drive a hard bargain, the transaction will not be allowed to Beynon r.

° ' Cook, L. R.

stand. ioch.389.

The rules respecting the right to rescind contracts ent^ed Limits of

into under Undue Influence follow, so far as equity is con- J^cind. |

cemed, the rules which apply to Fraud, but with one notice-

able qualification. In the case of Fraud, so soon as the

Fraud is discovered the parties are placed on equal terms,

and an aflirmation of the contract binds the party who was

originally defrauded. But in the case of Undue Influence it is

not a particular statement, but a combination of circumstances

which constitutes the vitiating element in the contract ; and

unless it is clear that the will of the injured party is

l62 FORMATION OF CONTRACT. Part II.

relieved from the dominant influence under which it has

acted, or that the imperfect knowledge with which he

entered into the contract is supplemented by the fullest

Moxoiiir. assistance and information, an affirmation will not be allowed

nvne, L. R. '

Ch.

t Ch. 881.

to bind him.

Chap.V. § I. LEGALITY OF OBJfiCT. 1 63

CHAPTER V.

Iiegality of Ol]tieet^'

There is one more element in the formation of contract

which remains to be considered — ^the object of the parties.

Certain limitations are imposed bj law apon the freedom

of contract. Certain objects of contract are forbidden or

discouraged by law ] and though all other requisites for the

formation of a contract be complied with, jet if these objects

are in contemplation of the parties when thej enter into

their agreement the law will not enforce it.

Two matters of inquiry present themselves in respect of Two sub-

this subject. The first is the nature and classification of the quiry :

objects regarded by law as illegal. The second is the efiect (i) the

of the presence of such objects upon the contracts in which ^2^ the