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An overview of the legal concepts of undue influence and unconscionable dealing in the context of equity and trusts. It covers the elements of actual and presumed undue influence, recognized relationships, rebutting the presumption, unconscionable dealing, and defenses and remedies. This information is valuable for university students studying law, particularly those focusing on equity and trusts.
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Equity may set aside a transaction if there is a breach of an equitable duty (Nocton v Ashburton) irrespective of intention to cheat_._ The relationship between X and Y may be classified as (actual/presumed) undue influence (Allcard v Skinner). However, a court will not set aside any unfair contract (Bruzewitz v Brown). CLASS 1) ACTUAL It appears that undue influence has been expressly exercised to procure the transaction (Allcard v Skinner). The elements of Aboodi’s Case must be satisfied to successfully argue a case of actual undue influence. The balance of probabilities rests of the P to prove that the D exercised actual undue influence.
**1. Dominant party has the capacity to influence the other
Equity may set aside a transaction where one party to a transaction is at a special disability or disadvantage, which is sufficiently evident to the other party, and makes it prima facie unconscionable for the other party to take the transaction (Amadio) The elements of Amadio must be satisfied to establish unconscionability
1. Special disability leading to no equality of bargaining power a. Poverty or need of any kind, sickness, age, sex, infirmity of the mind or body, long-term drunkenness, illiteracy, lack of education, or lack of assistance where necessary ( Blomley v Ryan) b. Emotional dependence, infatuation and love, superficial conditions of stress (Louth v Diprose) 2. Disability was sufficiently evident to the other party (knew or should have **known)