Contracts & ExecutionQuestion 862 of 1605
'Undue influence' as a ground to rescind a contract typically involves:
a.A routine competitive bid
b.A fair, arm's-length negotiation between equals
c.A clearly written price term
d.Unfair persuasion of a party who is under the domination of, or reposes trust in, another, depriving them of free judgment
Explanation
Undue influence involves using a position of trust, authority, or a party's vulnerability to apply unfair persuasion that overcomes the weaker party's free will, so the resulting assent is not truly voluntary. It commonly arises where one party depends on or trusts the other. A contract tainted by undue influence is voidable. It is the opposite of a fair, arm's-length dealing between equals, and it is unrelated to how clearly the price is written or to ordinary competitive bidding.
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Reviewed by Abraham Chen — Licensed California General Contractor (CSLB License #1101856 — verify)