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. A presumption of undue influence arises once it is shown that the relationship between two parties falls within certain recognised relationships or, on the facts, constitutes a relationship of trust and confidence.

True correct incorrect

False correct incorrect

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. Which one of the following statements in relation to 'actual undue influence' is true?

The party seeking to rely upon actual undue influence must show that there is a relationship of trust and confidence between him/her and the other party. correct incorrect

The party seeking to rely upon actual undue influence must show that there is a manifest disadvantage resulting from the contract. correct incorrect

The party seeking to rely upon actual undue influence must show that his/her free will to enter or to decline the contract has been overcome by the influence of the other party. correct incorrect

An action for actual undue influence will fail if it is shown that the party seeking to rely upon actual undue influence would have entered the contract anyway. correct incorrect

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. In a case of evidential undue influence, the defendant may avoid a finding that the influence is undue by showing that there is no intention to commit a wrong or bad faith on its part.

True correct incorrect

False correct incorrect

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. In which one of the following relationships is it not possible to disapprove the existence of trust and confidence between the parties by contrary evidence?

The relationship between an unmarried couple. correct incorrect

The relationship between solicitor and client. correct incorrect

The relationship between army and soldier. correct incorrect

The relationship between bank and customer. correct incorrect

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. It is still the law that the party seeking to rely upon evidential undue influence must show manifest disadvantage on its part.

True correct incorrect

False correct incorrect

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. According to Royal Bank of Scotland plc v Etridge (No. 2) [2002] UKHL 44, [2002] 2 AC 773, there is no longer a requirement to establish manifest disadvantage. Instead, the emphasis is on whether the nature and size of the transaction (contract) can be readily explained by the parties' relationship or calls for some explanation because it raises suspicion.

True correct incorrect

False correct incorrect

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. A married couple live in a house owned by the wife and jointly own a family business. The husband persuades the wife to use the house as security to obtain loans from M Bank. In the loan application form, it is stated that the loan will be used for the purpose of the family business. A manager of M Bank interviews the couple in a branch of M Bank and is informed, during the interview, of their relationship and of the fact that the husband is responsible for the operation of the family business and that the wife has no active role. The manager then asks if the wife has received any independent advice on the application. The wife replies that she has a solicitor and will consult him about it. The wife then forgets to consult her solicitor. The next week, the application is approved and the wife and the manager sign a contract using the house as security of the loan. Five months later, the family business fails due to poor management and the couple is unable to repay the loan. M Bank then claims the wife's house. It has been established that the husband has unduly influenced the wife's decision to enter the security contract. Which one of the following statements most accurately summarises the legal positions of the parties?

M Bank is entitled to claim the house because M Bank has not unduly influenced the wife's decision to enter into the security contract. correct incorrect

M Bank is entitled to claim the house because it has not been put on inquiry since the application form stated that the loan was to be used for the family business partly owned by the wife. The security contract was thus to the advantage of the wife. correct incorrect

M Bank is not entitled to claim the house because it has not taken reasonable steps to ensure that the wife entered the security contract freely and with the knowledge of the implications of the transaction. correct incorrect

M Bank is not entitled to claim the house because it has been put on inquiry because the couple informed the manager during the interview that the wife had no active role in the family business. correct incorrect

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. If, in making a contractual agreement, one party has taken advantage of a relationship existing between the parties, the doctrine of undue influence might render the agreement voidable (liable to be set aside).

True correct incorrect

False correct incorrect