What is undue influence in contract law?

Undue influence in contract law refers to a situation where one party exerts an excessive level of influence over another party, often taking advantage of a position of power or authority in a way that undermines the free will of the influenced party. This typically involves a relationship where there is a disparity in power, such as between a guardian and a ward, a lawyer and a client, or a caregiver and an elderly person. In such cases, the party being influenced may not be making decisions based on their own judgment but rather feels compelled to agree due to the pressure exerted by the more dominant party.

This concept is critical because it seeks to protect individuals from exploitation and ensures that contracts are entered into freely and fairly. The legality of the contract can be challenged if it can be established that undue influence played a role in the agreement.

The other options do not accurately encapsulate the essence of undue influence: the first refers to a lack of consent, which relates to contract validity but not specifically to the dynamics of influence; the second describes coercion or duress, which involves threats rather than influence; and the last choice pertains to the absence of consideration and not the means by which one party might dominate another in a contract situation.