“The fact remains that both the alleged offer and the alleged acceptance were labelled `subject to contract`. If the “contract-dependent umbrella” had been lowered, these two communications would have raised it again. “. there is this damning point: everything in the opening letter was “contracted”. All subsequent negotiations were subject to this overriding initial condition. Along with the slowness of common law coercion, fair courts have allowed a contract to escape if any form of undue influence is used against a contracting party. “Real undue influence” is now essentially the same as coercion in its broader form. In these “Class 1” cases, an applicant proves that he was indeed placed under undue influence. The most relevant are cases of “presumed undue influence”, of which there are two subcategories. [305] “Category 2A” cases involve a person who is in a predefined relationship of trust with another person before entering into a very unfavourable transaction. In Allcard v Skinner, Miss Allcard joined a Christian sect, the “Protestant Sisters of the Poor,” led by their spiritual counselor Miss Skinner.
After taking a vow of poverty and obedience, she gave almost all her possessions to the sect. Lindley LJ concluded that if she had not been excluded from the lawsuit by losing 6 years, it could be assumed that Miss Allcard had been unduly influenced and could have cancelled the transfer. Other Class 2A relationships include the physician and patient, parent and child, lawyer and client, or any fiduciary relationship (but not wife and husband). Where the relationship does not fall within one of these cases, it is in “Class 2B” cases. In this case, an applicant can first prove that there was indeed a strong relationship of trust. If this happens and there is an unfavorable transaction, it is assumed that it is due to undue influence. [306] It is then up to the recipient of the property to rebut the presumption. This is of paramount importance in cases where banks usually lend money to a husband for his business and guarantee a mortgage on the common home of husband and wife. Significant problems arose, especially after the housing, stock market and currency crashes of the early 1990s, during which the husband`s business went bankrupt, the bank attempted to repossess the house, and the wife claimed that she had never understood or been pressured to do so about the effects of the mortgage. [307] While a bank may not have played an illegitimate role in making a “constructive note” of undue influence (i.B.e., if it knew something was wrong), the bank would lose its security and would not be able to repossess the house. In Royal Bank of Scotland plc v. Etridge,[308] the House of Lords ruled that, in such situations, a bank should ensure that the spouse was independently notified by a lawyer who, in turn, confirmed in writing that there was no question of undue influence before granting a loan.
During the 20th century, legislation and changes in court attitudes led to a comprehensive reform of 19th century contract law. [32] First, certain types of non-commercial contracts have enjoyed special protection, with “freedom of contract” appearing much more strongly on the side of large companies. [33] Consumer contracts were considered “contracts of adhesion” when there were no real negotiations and most people were given “take it or leave it” clauses. [34] The courts first required completely clear information before the offending terms could be applied,[35] the Misrepresentation Act 1967 shifted the burden of proof to companies to demonstrate that misleading statements were not negligent, and the Unfair Contract Terms Act 1977 created the power to remove contract terms that were “inappropriate” given the bargaining power. of the parties. Collective bargaining by trade unions and a growing number of workers` rights led the employment contract to an autonomous area of labour law, where workers had rights such as a minimum wage[36], fair dismissal[37], the right to join a union and to take collective action,[38] and these could not be abandoned in a contract with an employer. Private housing was subject to basic concepts such as the right to reparations and restrictions on unfair rent increases, although many protective measures were abolished in the 1980s. [39] Nevertheless, the scope of general contract law had been limited. This meant that most contracts entered into by people on an ordinary day were protected from the power of companies to enforce the conditions they chose for the sale of goods and services, at work and at home. Nevertheless, traditional contract law has remained the basis for these individual contracts, unless the courts or parliament grant special rights. At the international level, the United Kingdom has acceded to the European Union, which aims to harmonise key elements of consumer and labour law in all Member States. In addition, with the increasing opening of the market, commercial contract law has received principles from abroad.
The principles of European contract law, the UNIDROIT Principles of International Commercial Contracts and the practice of international commercial arbitration have changed the way we think about the principles of English treaties in an increasingly globalised economy. Unlike coercion and actual undue influence, in which unlawful pressure is exerted, or presumed undue influence, which depends on the abuse of a relationship of trust, other cases allow a vulnerable person to avoid an agreement solely on the grounds that he or she has been vulnerable and exploited. In The Medina,[309] the Court of Appeal found that a group of pilgrims who had been shipwrecked on a rock in the Red Sea did not have to pay £4,000 that they had promised a rescue ship because the “rescuers” had taken advantage of the pilgrims` vulnerable position. To avoid unjust enrichment, the tribunal replaced an arbitral award of £1800. Similarly, in Cresswell v. Potter, Mrs Cresswell transferred her share of their joint property to her ex-husband in exchange for exemption from mortgage repayments, which later earned her a profit of £1400. Since Potter profited from Ms. Creswell`s ignorance of the real estate transactions, Megarry J.
found the agreement to be countervailable. [310] A possible exception to this model, which is very limited today, is the defense of “non est factum,” which was originally in favor of the illiterate in the 19th century and allowed a person to have a signed contract cancelled if it is radically different from what was intended. [311] In Lloyds Bank Ltd v. Bundy,[312] Lord Denning MR suggested that it was time to classify all cases into a single doctrine of “inequality of bargaining power.” [313] This would have helped to find a way out of an agreement if, in the absence of independent advice, a person`s ability to negotiate better terms had been seriously compromised and would essentially have given the courts greater flexibility to modify contracts for the benefit of the weaker parties. The idea of a general uniform doctrine was rejected by some members of the House of Lords from 1979 onwards. [314] However, specific laws such as the Consumer Credit Act of 1974, the Landlords and Tenants Act of 1985 or the Employment Rights Act of 1996 create targeted rights for parties who do not have bargaining power, just as specific legislation describes a duty of disclosure and good faith. Just as there is no unified theory of bargaining power, a unified doctrine of freedom of contract was dismantled long ago, in which the parties do not engage in commercial transactions. [315] Part of the construction process involves the courts and the law, which involves clauses in the agreements.
[176] Courts usually include clauses when the express provisions of a contract fill a gap. Given their fundamental attachment to freedom of contract, the courts are reluctant to override the explicit clauses for the contracting parties. [177] This is particularly true when the parties to the contract are large, sophisticated companies, which have often negotiated comprehensive and detailed contractual terms with considerable legal effort between them.
