Every time a contract is signed, the potential exists that one party fails to perform the obligations specified under the contract. In such cases, the aggrieved party may elect to file a lawsuit to try to seek performance under the contract or, more typically, for losses incurred as a result of the other party’s non-performance. However, in some cases, there may be a defense to the enforcement of the contract. One such defense is undue influence.
Undue influence is the unfair or improper persuasion of one person by another or excessive persuasion that causes another person to act or refrain from acting by overcoming that person’s free will resulting in inequity. A party’s apparent consent to a contract (or transaction) is not free or real when it is obtained through undue influence. In other words, a contract obtained though undue influence is voidable. Consent is deemed to have been obtained through undue influence when the purported consent would have been refused if the acts constituting undue influence had not existed.
In California, there are four circumstances, prescribed by the civil code, in which undue influence occurs:
- when a person in whom another has placed confidence uses that confidence to obtain an unfair advantage,
- when a person who has real or apparent authority over another uses that authority to obtain an unfair advantage,
- when any person takes unfair advantage of another’s weakness of mind, or
- when any person takes unfair or grossly oppressive advantage of another’s distress or necessities.
Influence alone is not undue. Rather, the influence must be undue, which generally requires some form of deceit. Some relationships the may give rise to a situation of undue influence include:
- Parent and child
- Employer and employee
- Guardian and ward
- Doctor and patient
- Religious leader and follower
- Attorney and client
- Government and citizen
In other cases, undue influence may occur even if there was no traditional relationship between the parties. For example, a salesman may potentially be capable of exercising undue influence over a person who is elderly, very young and inexperienced, mentally ill, illiterate, or has any other quality that would put them in a vulnerable position when influenced into a contract. The existence of undue influence in each particular case is always a question of fact.
A San Jose Business Litigation Attorney can Protect Your Rights
Business and contract litigation can involve many different scenarios and legal claims that are challenging to prove in court, especially undue influence. The business litigation lawyers at Structure Law Group, LLP believe in your right to compensation for wrongdoing and we take on the most complex cases. Whether you suspect something is wrong or you have already fallen victim to an undue influence, please call our San Jose office at 408-441-7500 or fill out our online contact form to schedule your consultation today.