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A starting point would be Section 16 of the Contracts Act which states the general principle and the emphasis where such influence is deemed to exist and lays down rules for establishing on whom the burden of proof is in certain situations.
But this may not be enough.
However if the section is looked at carefully it is obvious that there are essential elements namely a relationship in which one party is dominant and the use of such dominance to obtain an unfair advantage.
Thus in Bank of China vs Maria Chia Sook Lan, the respondent who had charged her property for facilities given to her husband for his business contended that the bank had procured the execution of the guarantee by her by undue influence.
It was alleged that the bank acting through its servant had threatened her. It was conceded for the guarantor that although the bank was entitled to make him bankrupt, the threat to do so constituted undue influence.
The court took the view that considering the facts relating to the guarantee, Madam Chia had failed to establish undue influence. Of course this is not to say that a threat can never amount to undue influence. The bankers insisted, without any direct threat of a prosecution, on a settlement to which the father was to be a party.
He consented and executed an agreement to make an equitable mortgage of his property. It was held where a father takes upon himself a civil liability with the knowledge that unless he does so, his son will be exposed to a criminal prosecution, is not a free and voluntary agent and the agreement he makes under such circumstances is not enforceable in equity.
Apart from the general provisions and principles relating to undue influence the Contracts Act specifically sets out situations where a person is deemed to be in a position to dominate the will of another.
The effect of these stipulations is that where it can be established to support this presumption then it is not necessary to go any further to establish that such a person is in a position to dominate the will of the other.
There must be a further element present. The transaction must be unconscionable. Once this further element is established then it will be presumed that the transaction was entered into under undue influence.
This is reflected in Section 16 3 of the Contracts Act which reads: The existence of undue influence affects the consent which is a prerequisite to the existence of a valid agreement. Hence Section 20 reads: Any such contract may be set aside either absolutely or, if the party who was entitled to avoid it has received any benefit there under, upon such terms and conditions as to the court may seem just.Access the rankings for every component of the Global Competitiveness Index (GCI) by choosing an item from the pulldown menu which reproduces the structure of the GCI.
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undue influence, as defined in section 16;. Flavanone Mud is a three-phase rinse-off decongestion system that disrupts neither the skin surface equilibrium nor its density.
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