UNDUE INFLUENCES IN BANK AND ITS CUSTOMER

Rules In Relation To Undue Influences Between The

Bank And Its Customer

Rules In Relation To Undue Influences between the Bank and Its Customer

Introduction

The need for a clear definition of undue influence has emerged as probate courts and probate courts across the country increasingly must deal with conservatorship petitions alleging that undue influence is imminent, is actively taking place, or took place within the prior few months and is in danger of occurring again. This context is different from the usual court proceeding where allegations of undue influence concern matters which took place in the more distant past and the focus is on an outcome, usually one transaction, such as a will or a contract. (Campbell, 2002)

Claims of undue influence can be difficult to understand and prove, both because of the lack of a definition in the Probate Code and because it occurs behind closed doors without witnesses (McNaughton, 2002). Increasingly, though, probate courts have staff such as investigators or visitors who go out and interview proposed conservatees and determine their circumstances, including the presence of apparent undue influence. Probate courts are also receiving more information from community practitioners such as Adult Protective Services social workers, physicians, and hospital discharge planners. In fact, professionals from these groups often supply the background and justification for petitions for conservatorship.

Additionally, there is the risk that cases will not be handled consistently. Complicating the picture is traditional thinking that mental capacity and undue influence are intrinsically linked. In other words, undue influence occurs only if there are deficits in mental functioning. As Nerenberg (2010) notes in her literature review for this project, a United Kingdom court found otherwise in the Estate of Olson: Soundness of mind and body does not imply immunity from undue influence. It may require greater ingenuity to unduly influence a person of sound mind and body, and more evidence may be required to show that such a person was overcome than in the case of one weak of body and mind. (Campbell, 2002) But history and experience teach that minds of strong men and women have been overborne, and they have been by a master mind persuaded to consent to what in their sober and normal moments, and free from undue influence, they would not have done. Despite this clear finding and the reality that charismatic and malevolent leaders throughout history have imposed their thoughts and wills on entire countries, the perception that undue influence cannot exist without mental deficits persists.

Discussion

The doctrine of undue influence derives from English courts. A will contest heard by Sir Francis Bacon as the Lord Chancellor of England in 1617 illustrates common aspects of the process of undue influence which emerged in the context of a will contest. These aspects include frail health, and physical dependency, false affection, relationship poisoning, threats and mistreatment, and involvement in the execution of documents by and in favor of the alleged abuser (Welden-Smith, 2009) (Nerenberg, ...