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Learning about undue influence

On Behalf of | Jan 10, 2022 | Business Law

If you live in Washington, you may benefit from learning more about undue influence and how to identify it in your everyday life. Undue influence occurs when one party uses their relationship with another party to persuade and impact their decisions. Typically, the party attempting to affect the other’s decision has an elevated status, position of power, emotional ties, or higher education. The power is used as leverage to coerce the other into making decisions against their own interests.

Understanding undue influence

Undue influence describes a powerful person pressuring a less powerful person for their own interests. Typically, the outcome for the less powerful party is undesirable. Undue influence is a doctrine about inequity and people taking advantage in positions of power. The relationship between the two parties may interfere with the less powerful party’s ability to consent by their own free will. In exerting their position, the more powerful party takes advantage of the weaker party by putting them under influence.

The impact of undue influence

Certain relationships, like doctor-patient or parent-child, or more susceptible to undue influence so there are legal protections established. Fraud and undue influence can occur in anything from a small favor to a multi-million dollar merger. Oftentimes, a contract agreement will be null and void if it was signed under undue influence. The onus is on the person in the position of power to prove they didn’t use their status to take advantage of the other party.

Identifying undue influence

One may be accused of undue influence based on previous interactions when the victim’s trust was repeatedly used against their own best interest. Undue influence is a common problem in the finance industry where investors entrust brokers or someone else leveraging information who knowingly make a trade that could negatively impact investors’ return on income.