Tate v. Williamson (1866): Presumed undue influence

Areas of applicable law: Contract law – Undue influence – Presumed undue influence class 2a

Main arguments in this case: The case shows how a contract can be set aside (void) if it was entered into by virtue of coercion under presumed undue influence (Class 2a).

The fact of the case: The defendant became the financial advisor to the claimant who was an Oxford University undergraduate and followed an extravagant life style and was heavily in debt. The defendant advised the claimant to sell his estate to him for the amount of £7000. The claimant agreed and the estate was bought by the defendant. In fact the estate was a lot more in value than the price it was sold for. The defendant had not disclosed the real value of the estate to the claimant.

The agreement to sell the estate was set aside by the court as it was agreed by coercion. The relationship between the claimant and the defendant was of fiduciary nature which meant that the claimant had trust and confidence in the advice of the defendant which the defendant misused.