Breach, Remedies, and Defenses

Undue Influence in a Contract

Undue influence arises when, in a confidential relationship, someone exerts control in such a way that dominates the free will of the contracting person and benefits the person exerting the influence.

If a contract is deemed to be the result of undue influence, it is considered voidable. Undue influence occurs in a confidential relationship when a person exerts control in a way that dominates the free will of the contracting person and benefits the person exerting the influence. This means the person who was improperly influenced—for example, through threat or bribery—may cancel the contract.

To establish undue influence, a party needs to establish the following factors:

  • He or she is vulnerable or susceptible to undue influence by way of a confidential relationship.
  • The undue influencer is using the victim for the influencer's own benefit.

For example, suppose Alex is at a party and gets into a small skirmish with another person at the party. Police officers arrest Alex and put him in jail. The next morning, Alex calls his girlfriend, Jill, to bail him out. Jill tells Alex that she will pay his bail ($25,000) only if he signs a contract agreeing to buy a new house for her in the amount of $275,000. Alex agrees to this because he wants to get out of jail and keep his girlfriend happy. In other words, his agreement is based on pressure and not on reasonable thought and a genuine desire to enter into this agreement. In this case, Alex would have a valid basis for an undue influence claim. A court could deem the agreement voidable.