An argument of undue influence, a remedy in equity as is the plea of unconscionability, looks to the issue of the consent to the bargain. Undue influence, duress and unconscionability are distinct, but similar, but different remedies. They are often pleaded as alternative remedies and as the final defence .

In Morrison v. Coast Finance Ltd. ¹, the B.C. Court of Appeal noted:

“The equitable principles relating to undue influence and relief against unconscionable bargains are closely related, but the doctrines are separate and distinct. The finding here against undue influence does not conclude the question whether the appellant is entitled to relief against an unconscionable transaction. A plea of undue influence attacks the sufficiency of consent; a plea that a bargain is unconscionable invokes relief against an unfair advantage gained by an unconscientious use of power by a stronger party against a weaker. ...

Wood v Advanced Systems Technology, a 2008 decision of the New Brunswick Queen’s Bench defined undue influence as follows:

Equity exercised a separate and wider jurisdiction over contracts made without free consent than did the courts of common law.  Equity developed the doctrine of undue influence which may be stated as follows: If a person obtains any benefit from another under a contract by exerting an influence over that person which, in the opinion of the court, prevents the person form exercising an independent judgement in the matter in question, the second person can set aside the contract.  Cheshire, Fifoot & Furmston, at 298.

Undue influence has been defined as “some unfair and improper conduct, some coercion from outside, some over reaching, some form of cheating, and generally though not always some personal advantage obtained by (the guilty party)”.  (Allcard v. Skinner (1887), 36 CH.D. 145 (C.A); Blanchette v. Blanchette reflex, (1984), 40 R.F.L. (2d) 20 (Sask. Q.B.).  Any improper use by one contracting party of any form of oppression, coercion, compulsion or abuse of power or authority for the purchase of obtaining the consent of the other party may result in avoidance on the resulting contract on the ground of undue influence. Fridman, at 301.”

A plea of undue influence requires proof of or the presumption of a special relationship. The case of Julie’s Beauty Shoppe v MacDonald stated that in an employment relationship, undue influence is presumed to exist. In this case, the defendant employee had signed a contract in the middle of her one year apprenticeship period promising to continue in the employ of the plaintiff for a two year period after the conclusion of her training.

The employer sued to recover the stipulated sum under the contract following the default. On the basis of Lord Denning’s ratio in Lloyd’s Bank set forth below, Miss Macdonald was successful in her defence. The case presumed undue influence and was not fact driven, while such facts were certainly manifest, namely, a young girl training as an apprentice and fearful of losing her certification as a hairdresser.