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The difference is that where there is alleged actual

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The difference is that where there is alleged actual undue influence, the onus is on the party alleging the undue influence. Read the summaries and comments on Westmelton (Vic) Pty Ltd v Archer and Shulman and Garcia v National Australia Bank Ltd and answer the following question: 6) What are the factors that the court considers in determining whether a contract should be set aside due to undue influence? If there is no special relationship, the victim of undue influence can still avoid the contract on proof of undue influence. The difference is that where there is alleged actual undue influence, the onus is on the party alleging the undue influence. Exercise 11.3 Answer the following problem question using the IRAC method. Remember to state the relevant rules and cite cases where relevant. Maria is very old and religious. Maria has been ill for some time and believes that she does not have long to live. She decides to move into the Knights Templar Retirement Home and is visited there by Paul, her local priest, who advises Maria on all religious matters. Paul tells Maria that it is easier for a camel to pass through the “Eye of a Needle” than it is for a rich person to go to heaven (i.e., that it is much easier for a poor person and very unlikely that a wealthy person to go to heaven).
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Immediately after this he asks Maria to donate all her wealth on her death to the Knights Templar Retirement Home. She agrees to do so. Upon the sad day of her death Maria’s son Raymond finds out what happened and now wants to challenge Maria’s legal transfer of her property to the knights Templar Retirement Home. Advise Raymond whether the transfer of Maria’s property is likely to be set aside. The issue is to determine whether the contract that existed between Maria and the Knights Templar Retirement Home was created on the basis of duress or undue influence. Duress occurs when illegitimate pressure (such acts or threats) is applied that forces a party to enter into a contract. The effect of such acts or threats is that the innocent party is deprived of their free will. As a result, consent of the party is considered not to have been voluntary. If duress occurs, the contract is voidable at the option of the innocent party. Undue influence also examines the reality of agreement when some influence or pressure had played a part in obtaining assent. It occurs in the formation of a contract or in other dealings, such as gifts or transfers of property without adequate consideration. There are two kinds of undue influence: presumed and actual. To establish presumed undue influence, a special or fiduciary relationship had had to occur. It can be argued that a fiduciary relationship existed between Maria and the priest. A fiduciary relationship occurs when there is no exhaustive list of relations giving rise to a presumption of undue influence. The established categories include a religious minister and devotee.
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