This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
Undue influence is said, in most jurisdictions, to be presumed in transactions between persons in confidential relations whereby an advantage is gained by the person who holds the dominating situation.1 The confidential relations thus involved are the same as those considered under constructive fraud; and in the same cases as those in which a presumption of constructive fraud is said to arise, a presumption of itself, in some cases, be sufficient to raise a presumption of its existence. Transactions between guardian and ward, attorney and client, trustee and cestui que trust, or persons one of whom is dependent upon and subject to the control of the other, are illustrations of this doctrine. Dealings between parties thus situated, resulting in a benefit conferred upon, or an advantage gained by the one holding the dominating situation, naturally excite suspicion, and when the situation if; shown, then there is cast upon the party claiming the benefit or advantage, the burden of relieving himself from the suspicion thus engendered, and of showing, either by direct proof or by circumstances, that the transaction was free from fraud or undue influence, and that the other party acted without restraint and under no coercion, or any pressure direct or indirect, of the party benefited. This rule does not proceed upon a presumption of the invalidity of the particular transaction, without proof. The proof is made in the first instance when the relation and the personal intervention of the party claiming the benefit is shown. The law is not so impracticable as to refuse to take notice of the influence of greed and selfishness upon human conduct, and in the case supposed it wisely interposes by adjusting the quality and measure of proof to the circumstances, to protect the weaker party and, as far as may be, to make it certain that trust and confidence have not been perverted or abused." In re Smith, 95 N. Y. 516, 522 [quoted in Barnard v. Gantz, 140 N. Y. 249, 257, 35 N. E. 430].
1 Fisher v. Publishing Association, 83 Mich. 472, 48 N. W. 622.
2 Fisher v. Publishing Association, 85 Mich. 472, 48 N. W. 622.
3Walker v. Nicrosi, 135 Ala. 353, 33 So. 161.
1Illinois. Thomas v. Whitney, 186 111. 225, 57 N. E. 808; Roberts v. Wei-mer, 227 111. 138, 81 N. E. 40; Mors v. Peterson, 261 111. 532, 104 N. E. 216.
Indiana. Whitesell v. Strickler, 167 Ind. 602, 119 Am. St. Rep. 524, 78 N. E. 845.
Kansas. Smith v. Smith, 84 Kan. 242, 35 L. R. A. (N.S.) 044, 114 Pac. 245.
New Jersey. Dunn v. Dunn, 42 N. J. Eq. 431, 7 Atl. 842.
Utah. Peterson v. Budge, 35 Utah 596, 102 Pac. 211.
Washington. Landis v. Wintermute, 40 Wash. 673, 82 Pac. 1000.
Wisconsin. Doyle v. Welch, 100 Wis. 24, 75 N. W. 400.
"Undue influence, which is a species of fraud, when relied upon to annul a transaction inter partes, or a testamentary disposition, must be proved, and can not be presumed. But the relation in which the parties to a transaction stand to each other is often a material circumstance, and may of undue influence is said to exist.2 This presumption is prima facie only. A transaction between persons in actual relations of trust and confidence, will be upheld if it is the expression of the genuine and untrammeled assent of the parties seeking relief.3 This is especially true if the person in whom the trust is reposed gains no advantage by the transaction. Thus a conveyance by A, in contemplation of marriage to B, her confidential adviser, in trust for A, raises no presumption of undue influence.4 In transactions be tween persons in confidential relations, whereby an advantage is acquired by a person who does not hold the dominating relation, as in transfers by a husband to wife,5 or by a parent to a child,6 the fact that the consideration is inadequate does not of itself establish undue influence.
Contra, that even in such a case, a deed can be set aside only on "clear and convincing proof" of undue influence. See Willis v. Baker, 75 O. S. 291, 79 N. E. 466.
2Hensan v. Cookeey, 237 111. 620, 86 N. E. 1107; Mors v. Peterson, 261 111. 532, 104 N. E. 216; Whitesell v. Strick-ler, 167 Ind. 602, 119 Am. St Rep. 524, 78 N. E. 845; Landis v. Wintermute, 40 Wash. 673, 82 Pac. 1000; see Sec. 406 et seq.
3 Lang v. Lang, 284 111. 148, 119 N. E. 963; Rockey's Estate, 155 Pa. St. 453, 26 Atl. 656.
4Falk v. Turner, 101 Mass. 494.
5 Fitzgerald v. Fitzgerald, 168 Mass. 488, 47 N. E. 431. (Under an oral can-tract to hold in trust.)
In some jurisdictions the courts do not speak of a presumption of undue influence existing as between parties in a relation of trust and confidence, but they say that such transactions will be scrutinized closely.7 In any event, the party in whom trust and confidence are reposed must exercise the utmost good faith toward the other party.8